BusinessDay 11 Jun 2020 by BusinessDay

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news you can trust I ** thursDAY 11 june 2020 I vol. 19, no 582

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Associates rally support for Adesina as AfDB awaits independent investigation Odinaka Anudu

ssociates of Akinwumi Adesina, president of the African Development Bank (AfDB), have testified that he is a man of impeccable integrity who would not compromise his position for selfish gains or show behaviour unbecoming of the president of a continental financial institution. The embattled AfDB president is facing 16 allegations bordering on non-respect of internal rules and regulations in recruitment, mismanagement of Technologies for African Agriculture Transformation (TAAT) programme, appointment of friends and relatives, preferential treatment for Nigeria and Nigerians, among others. The allegations, which came Continues on page 31

Inside

Edo APC alleges ploy by Oshiomhole to gift state to opposition, insists on P. 30 indirect primary Building strong domestic capital markets and diversifying funding sources Back Page

President Muhammadu Buhari (r) and Vice President Yemi Osinbajo, during a virtual meeting of the Federal Executive Council at the Presidential Villa in Abuja, yesterday. NAN

Nigeria’s commitment to unify exchange rates grows as reforms beckon OLUFIKAYO OWOEYE & SEGUN ADAMS

igeria might make good its promise to unify its exchange rates and manage the naira sustainably to jumpstart the economy on recommendations of the country’s Economic Sustainability Committee as the new

coronavirus and lower-thanexpected oil revenues force a rethink in policy direction. A unification, which is likely to come in the form of collapsing the official rate with the Investors’ and Exporters’ (I&E) FX Window rate, was promised as part of reforms to be implemented when coronavirus-hit Nigeria sought IMF’s financial

assistance of $3.4bn in April. Nigeria has the official window, the I&E window and the parallel market for sales of dollars. The Economic Sustainability Committee (ESC), headed by Vice President Yemi Osinbajo, advised the country to “unify exchange rates to maximise naira returns to FAAC from

foreign exchange inflows” and “manage the exchange rate in a sustainable manner”, according to a draft of the Economic Sustainability Plan obtained by BusinessDay. To that end, the ESC has directed the nation’s apex bank to roll out modalities to migrate to a single exchange Continues on page 31

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Oil companies must produce crude oil at $10 per barrel or close shop - NNPC … says target is a must by end 2021 Olusola Bello

igerian National Petroleum Corporation (NNPC) has warned that companies that cannot bring their production cost to $10 per barrel come end of fiscal 2021 should close down. Mele Kyari, group managing director, NNPC, says companies must learn how to be efficient, be cost effective and do away with expenditure that are not necessary, stating that there are costs embedded into projects by contractors that are not realisable. According to Kyari, the expectation of the industry is that the price of crude oil be stable at about $42 a barrel by the end of the year. The NNPC boss, who spoke on ‘the Impact of COVID-19 on the Nigerian oil and gas – the

way forward’ at a webinar conference organised by National Association of Petroleum Explorationists (NAPE), said $10 per barrel cost of production was now the expectation of the industry by end 2021. This, he said, is realisable as new cost structures are being put in place at the moment. “Our vision is S10 per a barrel, more efficiency in the industry, more cost consciousness, and realistic cost. The ultimate thing is cost reduction,” he said. Currently, the cost of producing a barrel of crude oil in the country is between $20 to $30 per barrel, depending on the terrain in which a company operates. He bemoaned the apparent lack of efficiency among the operators, stating that it would not be business as usual, as the industry was now focused

on cost that would give more revenue. “Operational inefficiency will no longer be tolerated while technology adaptation for cost efficiency would be a major factor driving cost down. NNPC and its partners would pursue this aggressively. The situation where a company produces a barrel of crude oil at $93 is not acceptable. This means such a company is depending on revenue generated by others to survive,” he said. COVID-19, he said, is blessing in disguise, stating however that the only bad thing about it is the loss of prices of crude oil, which is currently coming back. He said before the advent of COVID-19, the NNPC already started a process meant to reduce the cost structure and also cost attached to environment issues by contractors.

Reps barred journalists from Control of Infectious Disease Bill public hearing James Kwen, Abuja

ournalists were Wednesday barred from covering public hearing on the controversial Control of Infectious Disease Bill (IDB) currently before the House of Representatives. When journalists, particularly members of the House of Representatives Press Corps turned up to cover the event, they were turned back by operatives of the Sergeant-at-Arms, acting on the instructions of the chairman of the Health Services Committee, and the committees Clerk, Joyce Umeru. According to the operatives who hid their identity, they were told that only the Nigerian Television Authority (NTA) and Channels TV were invited to cover the public hearing, hence journalists from other media organisations

cannot be allowed in. Sponsored by the speaker of the House of Representatives, Femi Gbajabiamilla, Pascal Obi, chairman, House Committee on Health Institutions, and Tanko Sununu, chairman of the Committee on Health Services, the Bill seeks to repeal the Quarantine Act and enact the Control of Infectious Diseases Bill, make provisions relating to quarantine and make regulations for preventing the introduction into and spread in Nigeria of dangerous infectious diseases, and for other related matters. The Bill had been heavily criticised, particularly for giving too much powers to the Nigerian Centre for Disease Control (NCDC) in the management of infectious diseases and pandemic in the country in ways that could infringe on the fundamental hu-

man rights of Nigerians. The Bill among others empowered the director-general of the NCDC to be in charge of the administration of the new Act, notification of prescribed infectious diseases, surveillance, medical examination and treatment, vaccination post-mortem examination, destruction and disposal of infected animals, food and water, isolation of certain persons, prohibition or restriction of meetings, gatherings and public entertainments as well as control of occupation, trade or business. Some provisions of the Bill stipulate: “Except as otherwise provided by this Act, the DirectorGeneral of Nigerian Centre for Disease Control shall, subject to any general or special directions of the Minister, be responsible for the administration of this Act.

NPA pushes for Single Window to ensure automation drives port operations

…we need virtual port that is contactless and paperless – Shippers’ Council AMAKA ANAGOR-EWUZIE

igeria Ports Authority (NPA) says efforts are on top gear to ensure that Single Window cargo clearing platform is established in the nation’s seaports in order to drive efficient and automate port operations needed at this time of the outbreak of coronavirus (Covid-19) pandemic. For the authority, one of the things hindering Nigerian ports from achieving efficient and timely service delivery, which translates into huge cost for the consignee, is the absence of Single Window platform. A Single Window is a trade facilitation system that allows a user to get sufficient information concerning international trade from one source that brings all the parties together under one platform. The implementation of a single window system enables in-

ternational traders to submit regulatory documents at a single location or single entity at same time. Speaking in Lagos on Wednesday during a webinar session on ‘Covid-19 and the Nigerian Maritime Sector: Lessons and the Way Forward,’ Hadiza Bala Usman, managing director, NPA, said the establishment of Single Window would ensure that Nigeria had less human interventions in cargo clearing system. “We are pushing to ensure that this automation is deployed within the shortest period to reduce cost for port users. Though, the critical component of this platform lies with the Nigeria Customs Service,” she said. According to Usman, the NPA has also been engaging with the Presidential Task Force (PTF) on Covid-19 to lift the directive, which states that vessels coming from high risk www.businessday.ng

countries must wait on Nigerian waters for 14 days before berthing. Stating that a lot of vessels go to West African neighbouring port first before coming to Nigeria, Usman said there might not be need to say that a vessel coming from Tema, Ghana, must wait for 14 days before it could be allowed to berth in Nigerian port. “This is a big concern that is ongoing with the shipping companies. However, in line with the International Maritime Organisation (IMO) submission that member states should ensure that vessels are given free passage in and out of ports, we are suggesting that maybe we can quarantine the crew because they could be the ones that may have infection, and the Nigerian Centre for Disease Control (NCDC) has the necessary protocol to handle that,” she said. https://www.facebook.com/businessdayng

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Regions with high coronavirus cases in Nigeria ADEMOLA ASUNLOYE

ince the emergence of coronavirus (COVID-19) in Nigeria in late February 2020, the virus has spread to all but one state—Cross River, according to the Nigeria Centre for Disease Control (NCDC). As at June 8, 2020, the total number of confirmed cases of the coronavirus in the 35 states and the Federal Capital Territory (Abuja) has accumulated to 12,512 cases; with 8,199 ‘Active Cases’; 3,959 ‘Discharged Cases’ and sadly, 354 persons have died of the coronavirus disease caused by the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). This also means that 65.53 per cent of the coronavirus infected persons in Nigeria are still sick; 31.64 per cent have recovered and 2.83 per cent of the infected persons in the country have died of the virus as at the reference date above. It is therefore worrisome to see that the government of Nigeria is now a copycat of other European countries, especially that the lockdown of Ogun State, Lagos State and the national capital city, Abuja which adversely affected the economy of the country. The lockdown was mandated when the total confirmed cases in the country were just about 131 cases and 2 deaths as on the 30th of March, but then, it gradually eased the lockdown when confirmed cases hits about 2,805 cases with 94 deaths; since then, the curve has been on the rise. “So, what has changed, the curve hasn’t flattened? recovery rate has not increased, death rate has not diminished…”, these and many more

are the everyday questions. As at June 8, 2020, the total “Confirmed Cases” of Covid-19 released by the Nigeria Centre for Disease Control is less by 26 confirmed cases: that is, the total individual states’ daily confirmed cases and country daily confirmed cases summed up to 12,512 instead of the 12,486 posted on the NCDC Covid-19 website. For correctional purposes, see the dates where the errors on the total confirm cases were discovered, where “less by” means minus and “up by” means add: less by 2 on 30/ Apr; less by 1 on 30/Apr; less by 1 on 03/May; up by 2 on 05/ May; less by 2 on 09/ May; less by 1 on 10/ May; less by 2 on 13/ May; less by 4 on 14/ May; less by 8 on 18/ May and less by 7 on the 6th of May 2020. On region by region basis, the number of confirmed cases in the country is due largely to the number of cases in the southwest and northwest region where 52.81 per cent of the infected persons in Nigeria are from southwest region alone, followed by 18.21 per cent from the northwest. What this means is that,

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if we remove the number of confirmed cases in the southwest and the northwest region from the total number of confirmed cases in the country, only 3,626 persons would have been confirmed to have contracted the coronavirus in Nigeria as at the reference date. By proxy, the Internally Generated Revenue (IGR) of a state/region can serve as a reflection of the commercial activities going on in a state/ region. This can explain (a factor), but not exclusive to other reasons, why the contagion is widespread in the southwest. Unlike the southwest region which is a commercial nerve centre, the high incidence of confirmed cases in the northwest could not have been due mainly to high commercial activities as the region was 4th out of the 6 regions in terms of commerce (using IGR 2019 as proxy); then, other factors than commerce must be responsible for the spread within the northwest region. According to the IGR as at December 2019, from top to least, and using the IGR as proxy to commercial activities in the region, southwest leads

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the pack, followed by southsouth, northcentral, northwest, southeast and northeast. The incidence of confirmed cases in the southwest region is driven by the number of confirmed cases in Lagos, as Lagos alone is responsible for 87.29 per cent of the confirmed cases within the region. As at the reference date, Lagos reported 5,767 confirmed cases, 944 discharged cases, 67 deaths, while the remaining 4,756 infected persons still lay sick. If we were to exclude the confirmed cases of coronavirus in Lagos in the southwest region, only 840 cases would have been confirmed in the southwest region. This would have placed the southwest region as 5th most infected region of the 6 regions in Nigeria. Although the Lagos Government has already eased the lockdown despite the huge number of confirmed cases, it therefore raised the question whether it was necessary to have halted economic activities in the first place given that we are back to work but this time with guidelines to follow. In the northwest region, Kano is the epicenter of the coronavirus with almost half (43.84 per cent) of the total cases within the region. As at the reference date, Kano recorded 999 confirmed cases with 450 discharged and 48 deaths, while 501 persons are still infected with the virus. The remaining 6 states within northwest constituted the remaining 56.16 per cent of the cases in the region. Aside these two outlier regions (southwest and northwest), the number of confirmed cases in each of the remaining 4 regions are not more than 3,626 cases. Where the northcentral recorded 1,379 cases represent-

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ing 11.02 per cent of the total confirmed cases in the country; northeast, 976 cases (representing 7.80 per cent); south-south, 958 (representing 7.66 per cent), the least of 313 infected cases (representing 2.50 per cent of the total infected cases) were recorded in the southeast. Although the southeast recorded the least infected cases among other regions, the states therein are not the states with the lowest number of infected cases of the coronavirus. As this pandemic loom, businesses across these regions are contending with revenue generation and disrupted supply chains as governments have mandated shutdowns and quarantine measures to curb the spread, which adversely affected and commerce. All the sectors of the economies in these regions had their share of the cake—from manufacturing to education, traditional retail, professional sports and entertainment, among others. Many businesses within these sectors have had their operations crippled by the restrictions resulting in significant losses. Demand, supply and workforce availability have all been affected in the manufacturing sector across regions as manufacturers struggle to sustain productivity in the absence of digital infrastructure to support remote operations. On the contrary, this opened windows of opportunities for digitally-enabled businesses. The telecommunications industry is rising to the challenge; network providers have become the drivers during the lockdown and are experiencing a revenue surge because the internet has become essential for connection.

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Before Miyetti Allah kill Nigeria Positive Growth with Babs

Babs OlugbemI

efore I explore why Miyetti Allah will kill Nigeria, I would like to quote from my previous articles. Nigeria is better and more significant as a united entity subject to the acceptance and respect for the religions and ethnicities of all the people. Countries that have witnessed disintegration have started by allowing reckless statements and superiority sentiments like those credited to Miyetti Allah in the recent time. Nigeria is getting divided day by day by these words of war, and the indecisiveness of our political leaders will help those without the capacity to see the significant benefits of a diverse society where equity and justice reign. The late Sanni Abacha was an example of a decisive leader when it comes to keeping the country together. Don’t get me wrong; I am not eulogising Sanni, the late dictator. Sanni did a lot of havoc for which his name and memory should be a lesson for leaders. He saved millions of Nigeria’s monies according to Buba Galadima, a purported co-custodian and signatory to the Abacha savings accounts for Nigeria. I hope Buba is helping the federal government to trace the rest of the stolen wealth. Otherwise, it is a case of another offhand comment

without consequences. Abacha was decisive according to one of Femi Fani-Kayode’s speeches to have ordered the execution of the nine people involved in the killing of Gideon Akaluka who was beheaded in Kano in 1995 for desecrating the Qur’an. Abacha rose to the occasion by proclaiming no place for the evil as big as cutting off a man’s head and hanging it in a video celebration for desecrating the Qur’an. Gideon was taken from the police station by a mob of people led by nine socalled educated Islamic scholars with Sudan based radicalisation experience. Abacha as good as he was in the looting of the fund, or sorry for keeping money abroad for subsequent government was braved enough to identify the effects of religious fundamentalism in a secular nation like Nigeria. He knew Nigeria would become a foregone name if nothing is done and ordered the execution of the perpetrators without remorse. Akaluka was not the only Nigerian who suffered from religious riots from the mostly uneducated youth of northern Nigeria and weapons in the hands of selfish-oriented politicians who used religion as a tool to divide us. We can recall the likes of Christianah Oluwasesin, Grace Ushang and multitude of Igbo traders and Christians. These are before the wave of banditry, Boko Haram, herdsmen killings in Benue, Plateau, Adamawa, and the entire north. We are lucky that there was no courage or there was a deliberate decision not to instigate reprisal attacks which could have led to another civil or religious wars in the past. Some people are left with the scars of the past unrest while the country remains one even with clear division and agitations. The recent agitations by the Igbo, Ijaw and

Yoruba nations for restructuring are the cumulative effects of the perceived injustice in Nigeria. The violence in the country has been lopsided to a section and a religion. We must know that no tribe or religion is licensed to cause mayhem. Others who are perceived to be peaceful can be pushed into defending themselves and their territories if no action is taken to protect them. For Nigeria to build on its past no matter how unjust it might be, we need to stop the drum of war by the likes of Miyetti Allah and any other ethnic groups. While the IPOB, the Ijaw, Middle Belt and the Yoruba groups have been more civilised in their approach, the entitlement mindset and speeches of the Miyetti Allah need to be checkmated by the elites of the north and leaders if they desire to see a united country where their children will live and prosper. Whether it is a piece of fake news or not, the recent statement credited to the Miyetti Allah Kautal Hore group is unfortunate and a setback in the process of building a nation. Bello Abdullahi Bodejo is occupying a leadership position and is seen as the spokesperson for the association. He was reported to have said the Fulanis will rule Nigeria forever and will occupy any land they want in Nigeria. He further posited that they would deploy their security outfit, just like the Amotekun in all the states of Nigeria. I don’t think Bodejo understand his utterances or does he think speaking that way will create fear or unite Nigerians. He must have said that because his past statements for his association have either gone unpunished or criticised by leaders, especially the Fulanis leaders. At the inception of Amotekun

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For Nigeria to build on its past no matter how unjust it might be, we need to stop the drum of war by the likes of Miyetti Allah and any other ethnic groups

f I had any doubt about how deeply disorienting the COVID-19 pandemic has affected our psyche, it is the fact that the 56th anniversary of the Nigerian Air Force (NAF) could have skipped my attention. As someone who has been associated with the Service in the past four years, I have come to appreciate the significant transformation that has taken place under the leadership of the incumbent Chief of the Air Staff Air Marshal Sadique Abubakar. It is in his ability to effectively translate President Muhammadu Buhari’s unparalleled support for the NAF, into epochal dividends, that Air Marshal Abubakar stands out not just as a patriotic military commander but a foremost transformational leader of men and materials. It is within this context that the 56th anniversary of the NAF should be considered and understood. It is a huge task appraising the growth of a strategic institution such as the NAF in a very short article. Suffice it to say that this year’s anniversary of the NAF, the youngest member of Nigeria’s Armed Forces, deserves special mention, not only on account of the fact that, at 56, it has really come of age but also in recognition of the outstanding contribution the Service has made to the successes recorded in the counter-insurgency campaign, under the Muhammadu Buhari Administration. Doubtless to say, without the enhanced firepower of the NAF, culminating in highly destabilising aerial bombardment of the Boko Haram insurgents, the Nigerian Armed Forces would have been hard-pressed achieving even the modest “technical defeat”, of the insurgent group, that has been a perennial menace, over the past decade or so. To those who would always dispute the successes recorded in the counter-insurgency effort, and that is without prejudice to the game of musical chairs that often plays out

in the North East, it is noteworthy that, unlike the situation some years ago, today, neither do residents of the Federal Capital Territory of Abuja any longer dread visiting parks and gardens nor do they nurse any fears that they could be bombed at the various business plazas and places of worship, in the city. No longer are roads leading to strategic national institutions barricaded all round, with intracity commuters subjected to excruciating traffic snarls and pervasive commutation rigmarole. While the NAF has recorded an array of achievements since inception, my intimate relationship with the Service, in the past couple of years leads to the conclusion that never has the Service had it so good in terms of financial and logistical support, on the one hand, and Service delivery, on the other hand. Notable among these are the conscious pursuit of a diversity policy that has led to increase in the number of winged female combat pilots, from two to seven; successful induction (not unveiling), of the unmanned aerial vehicle (the Tsaigumi drone) in 2018; unprecedented growth of R&D epitomised in the domestication of aircraft maintenance and other equipment, manufacture of spares and placement of staff welfare and motivation on the front burner of leadership consideration. It is axiomatic that every change, especially the paradigm shifting changes of the nature that are sweeping through the NAF, could only have been driven by purposeful goaldirected leadership. I should restate that I have been privileged to be associated with the Service during this period. I can say, without any fear of contradiction that the ability of the NAF to revive unserviceable aircraft that were deployed into the counter-insurgency campaign, is attributable to the bold initiative of Air Marshal Sadique Abubakar and the

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Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, the Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

extra-ordinary ingenuity of the officers, men and women who, when challenged by the CAS, rose ebulliently to the demands of the moment. Also noteworthy is the fact that the domestication of equipment maintenance and repairs, by the NAF, has impacted positively on the country’s institutions of higher learning, research agencies and engineering companies. As has become lamentably obvious, though the country’s higher institutions incubate a reservoir of geniuses, not many have been given the opportunity to showcase their talents. That ugly narrative has changed in the Buhari era, with the Air Force signing mutually beneficial MOUs with 26 entities: universities, research institutes and engineering companies. I can confirm that the relationship between the Nigerian Air Force and the universities has tremendously boosted the ability of the Service in the re-activation of unserviceable platforms as well as the maintenance culture that has been the mantra of the Federal Government. My investigation into the R&D strides recorded under the Sadique Abubakar leadership of the NAF, took me to the University of Maiduguri in Borno State. Our target was Engineer Muhammed Shuwa, of the Mechanical Engineering Department, a man whose creative genius was responsible for re-launching the hitherto unserviceable Alpha Jet aircraft, into service. Ironically, that feat was achieved after all hope had been given up, over failure to source the anti-skid test bench for the aircraft, from either original equipment manufacturers (OEMs) or other vendors. Shuwa stoically rose to the challenge and in collaboration with men of the R&D Department of the NAF, was able to produce an improved version of the anti-skid test bench kit. Without the anti-skid test bench kit, the resuscitation of the firing power of the

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in the south-west, Mayetti Allah was reported to have urged the leaders of the south-west to drop Amotekun or lose the presidency in 2023. Bodejo also referred to the Yoruba nation as the most primitive for trying to keep peace within her region. This show the smacks of indecency of an ethnic association in Nigeria. While the IPOB in the southeast is peaceful in her approach and have reasons to claim marginalisation of the Igbos since the civil war ended. Those in the south-south have legitimate agitational reasons for being the goose that lay the golden eggs. Yet, with the most deprived environment and arrested development. I still wonder the grouse of the likes of Boko Haram and the Miyetti Allah with their violence and divisive words for a war they cannot fight alone. Boko Haram is our visible and known enemy for violence killing of Nigerians, Miyetti Allah is sowing seeds of discord among the future generations. It will help if you read how divided Nigerian youths are with their comments on social media in reaction to Bodejo’s purported comment which is not the first. We are already showing the signs of bitter inter-ethnic words which led to the breakup of Yugoslavia. We need to caution the leadership of Miyetti Allah before they kill Nigeria with their words of war whether they deny their claimed ownership of the country or not. Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng

NAF at 56: Signposts to a promising future

Emma Agu NAF, in the early days of the Buhari Administration, would not have been possible. While this collaboration has been warmly received by the universities, it is equally true that NAF personnel, who are charged with R&D, have found the collaboration, a most rewarding experience. Without exception, while not diminishing the contributions of his predecessors, all the officers with whom I interacted unequivocally extolled the unparalleled catalytic role of the current Chief of the Air Staff, Air Marshal SB Abubakar, in the paradigm shift, that promises to place the NAF on a stronger footing, in the years ahead. If the visionary emphasis on R&D has led to phenomenal improvements in local capacity building and firepower, the doctrinal changes that have occurred, in the past four years, have transformed the Service into a better coordinated security machine, positioned to achieve its motto of “Willing, Able, Ready”; a motto that is driven by the CAS SB Abubakar Vision Statement which is: “To reposition the Nigerian Air Force into a highly professional and disciplined force through capacity building initiatives for effective, efficient and timely deployment of air power in response to Nigeria’s national security imperatives”. The creation of two Commands: The Special Operations Command in Bauchi and the Ground Training Command in Enugu, constitute the high points of the dynamic changes in structure under the Buhari era. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Agu is the former managing Director of Champion Newspapers

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Kogi state & Coro: The politics of acrimony & incivility... Between Rwandan Tutsis & Nigerian Ndi-Igbo

ik MUO

e continue with our foray into the political dynamics of the war against Coro, our unseen unknown and vicious enemy and today, we berth at Kogi State, ruled by Yahaya Bello, one of the “small-boy” governors of this dispensation. In the political dynamics of Nigeria Coro management Kogi and Rivers states appear to have the same agenda: to “counter mote” the Federal Government but their strategies and tactics differ. While Wike is physically involved and fires on all cylinders against the FG, mostly by action, Bello stays a little bit off the war front and urges his boys on as they pour unprintable, uncouth venom, devoid of any officialese at the NCDC. Kogi’s political armament revolves around demarketing and impugning the individual and corporate integrity of NCDC, and in effect distracting the Federal Agency and its agents at the forefront of this war against coro. My shock was unparalleled when I read a statement credited to Governor Bello that Coro in Nigeria “is political, full of lies and an avenue for political office holders and corrupt officials to embezzle and steal the nation’s resources”. That was on 25/3/20, when Nigeria had just 44 confirmed cases. However, while I was trying to tidy up this piece, I went on a QC Quality Control) exercise and found a belated rebuttal, which was issued on 16/4/20, about 3 whole weeks later, through his Chief Press Secretary Onogwu Mohammed. The Governor also denied ever “asking people to take hot water with garlic, ginger, lemon, lime as well as steaming themselves as a cure

for coro.” Two weeks later, (29/4/20), Kogi State told the NCDC that it could not “declare COVID-19 where none exists” and that was response to Ihekweazu’s statement “that states which are yet to record cases of COVID-19 are either negligent in testing and tracing or actively hiding the disease within their territories”. The state wondered why the NCDC did not commend the state’s Olympian efforts in coro-containment. The following week (5/5/20) the state raised an alarm that there were unholy efforts to declare ghost coro cases for the state. Kingsley Fanwo, (State Information Commissioner) complained about the recent pressures and unholy conspiracy from some interesting quarters for Kogi State to find and declare cases of the disease. Few days later, when NCDC sent its Rapid Response Squad, the governor ordered that they be quarantined for 14 days in line with NCDC protocols and that was the end of their Kogi programme On 27/5, NCDC declared that Kogi, which had frustrated all efforts of NCD to operate in the state, had 2 coronised patients and all hell was literally let loose. The government, through its State Commissioner for Health rejected the figures, insisting that we will not be a party to any fictitious COVID-19 claims and that any attempt to force us to announce a case of COVID-19 will be vehemently rejected. He further declared that “One needs not to dig deeper to see the handwriting clearly written on the wall at how desperate NCDC is to nail Kogi State with a COVID-19 case and there is no telling how low they are willing to stoop to do so! Chai! Government official, a medic talking to another government official, a medic, in the market square! Ihe emebiwo! (Things are no longer what they used to be). Kingsley Fanwo, tried to outdo his health colleague, in foul language saying that “It’s a backdoor declaration laden with a lot of fraud and falsehood …a very bad script acted by bad actors.” He also accused NCDC of trying to democratise coro across Nigeria because of its agenda. He had explained

that the patients were smuggled from Kogi to Abuja and that Kogi operatives were denied access to the patients. Of course, as per their earlier stand, officials from Kogi should be quarantined for 2 weeks before coming anywhere close to the hospital! The family patient confirmed that he died of coronavirus, holding that there is no need for the Kogi state government to deny the obvious. Dino Melaye, the governor’s “friend” added that COVID-19 case in Kogi was real and authentic, that, “One of the cases is from Kabba and the victim is personally known to me. I cannot be part of those who will play politics with the lives of my people”. When NCDC announced the 3rd case, Kogi again denied ownership, saying “We are not aware of who the patient is, where and when the test was conducted. No sample sent from Kogi The Nigerian Medical Association (NMA) joined the fray, appealing to the FG to call the State Governor and his officials to order immediately and also issue an order granting unfettered access and protection to NCDC officials into Kogi State. It also stated that it was incredibly disturbed by the response of the Kogi State government through the State Commissioner of Information, who not only described the process of arriving at the diagnosis as fraudulent, but also went on to smear the frontline Health workers and the NCDC on live national television. Eventually and while insisting that Kogi is coro-free, the governors declared a total lockdown on Kabba and environ. To further, throw in more confusion into the complex equation he went on to reverse the same lock down two days later! Whats gwan? What are they fighting for? Is there any personal war against Ihekweazu or corporate war against NCDC? Is this how to conduct official communication? I would have said that foul and area-boy language is in their character but Kogi state was civil and official when it was grovelling and begging for N10 billion from the FG in November 2019, a few days to the governorship elections. Why has the FG not intervened, if for nothing else, because the integrity of NCDC and its processes are being thrown

‘

Whats gwan? What are they fighting for? Is there any personal war against Ihekweazu or corporate war against NCDC? Is this how to conduct official communication? I would have said that foul and area-boy language is in their character but Kogi state was civil and official when it was grovelling and begging for N10 billion from the FG in November 2019, a few days to the governorship elections

repositioning the country and a commitment to complement the vision 202020, economic diversification became a major focus for growth restoration and consolidation in the ERGP. Despite this unwavering effort from 2015 till date, it is still unclear of any evidence of improvement on the diversification scorecard. Has diversification become a mystery or myth in policy stance? What does it even mean to diversify Nigeria’s economy? From an economic perspective, diversification encompasses three broad areas in Nigeria. First, diversification with regards to economic activities-GDP. Several commentaries are hovering around that Nigeria’s economy is diversified with the existing GDP structure but this is incorrect. If it is, then why are we still traversing around the same economic woes? The structure of Nigeria’s GDP is 90 percent contributions from the non-oil sector and around 10 percent from the oil sector. This trend has remained the same for decades. A further disaggregation of the 90 percent contributions from the non-oil sector revealed that manufacturing contributes less than 10 percent to GDP while agriculture-mainly subsistence farming contributes about 22.0 percent. Basically, the agricultural GDP is more rainfed than accumulation of factors of production and their productivity. Hence, the capacity to generate employment and revenue for the government is undauntedly low. Also, the agricultural production process in Nigeria is more labour intensive than capital investment, thereby exposing the low knowledge intensity of

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the products for global demand and explaining the insignificant foreign exchange earnings from the sector. Consequently, the economy lacks the capacity for ensuring long-run growth and sustainability. For instance, in 2019, Cote D’ívoire the world leading supplier of cocoa beans to the tune of 38 percent of the world cocoa supply realised $3.78 billion as export earnings while Mars, just one of the leading chocolate companies that would have imported cocoa beans from Cote D’ivoire had a net sale of $18 billion. The huge variance is occasioned by the value addition that would have resulted in Mars paying company income tax and personal income tax by the employees. It is a sorry case juxtaposing this to Cote D’ivoire’s extractive cocoa sector that generates far less revenue and employment for the country. Cocoa beans price will always remain uncertain but chocolate price remains stable. Also, extractive based products have inelastic demand but agro-allied or manufactured products have elastic demand hence more beneficial to a country. Second, diversification with respect to domestic resources mobilisation-revenue generation. As at today, the oil sector contributes about 65 percent revenue to the federation account and this is susceptible to uncertainty because oil price is exogenously determined explaining the ceaseless fiscal shock in the country. If 90 percent of a country’s GDP comes from the non-oil sector but the oil sector that contributes less than 10 percent now takes a lead in revenue generation, it portends from the above that the non-oil sector

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Other matters: Between Rwandan Tutsis and the Nigerian Igbos In 1994, a genocidal bloodletting lasted for 100 days which led to the death of 800000 Rwandans, mostly Tutsis. It started “like joke, like joke” on 16/4/94 when presidents Habyarimana and Ntaryamira of Rwanda and Brundi, both Hutus, perished after the plane carrying them was gunned down. The majority Hutus then turned on the Tutsi minority tribe eliminating about 70 percent of them plus some modest Hutus. Since then, the world, and particularly Rwanda remember this sad historical reality. The UN established the International Criminal Tribunal for Rwanda in 1995 and Rwanda continues to celebrate the memories of its 800000 compatriots, declaring always: Never Again. It has a memorial arcade holding their names; established the National Commission for the Fight Against Genocide, and holds an annual weekly celebration from 7-13 April, involving Walk to Remember, a night vigil and remembrance ceremony the. The 26th edition was celebrated under this coro environment in April 2020 during which Mr & Mrs Kegame laid wreaths on graves at the Kigali Genocide Memorial. where the remains of more than 250,000 genocide victims were buried. The UN Gen-Sec remarked that “Since the genocide, Rwanda has demonstrated that it is possible to rise from the ashes, to heal and to rebuild a stronger and more sustainable society.” So, it is celebrated by Uganda, AU and the whole world. And just the other day, Kabuda, one of the masterminds of the genocide was arrested; 26 years after the event. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

The mystery of economic diversification in Nigeria

igeria is Africa’s largest economy with a GDP of about $447 billion. The economy grows on an average of 2.0 percent with a disproportionate population growth of about 3.0 percent resulting in a low standard of living as measured by real GDP per capita of $2,200 compared to South Africa with a real GDP per capita of $6,100. This denotes that if Nigeria is to double her GDP by the golden rule of 70, it will take Nigeria about 35 years while her population will double in less than 24 years explaining a widening disparity and the reason for alarming poverty and unemployment rates. Currently, unemployment rate is projected above 30 percent and about 40.1 percent of the population lives below the poverty line. In fact, according to the World Poverty Clock about six Nigerians enter the poverty line every minute. Over the years, the economic fundamentals have not really changed and a lack of economic diversification is associated with such vulnerabilities not only to global shock but also undermining long-run growth. However, it is becoming clear that diversification is not just a challenge but also misconstrued by many. Thus, an economic insight into the mystery of diversification in Nigeria. A cursory look at several policy documentsNEEDS, Vision 202020, the 7-point Agenda, the Transformation Agenda, and recently the ERGP, it is evidently clear that diversification emphasis has been a recurring decimal over the years. In fact, the current administration’s bid to salvage and reverse the current economic order in

to the dogs. Anyway, ‘na dem sabi wetin dem de fight for’! But as the fly is utterly confused when a fart comes from above, so am I in this Kogi matter!

Perekunah Eregha lacks the capacity to generate revenue cum employment in matching the 90 percent domestic economic activities’ contribution. Revenue is a percentage of output-GDP and with so much non-oil GDP, less revenue is generated undermining the production intensity of the non-oil sector indicative of an undiversified economy. It makes economic sense for the non-oil sector to take the lead in revenue generation but this has always been the challenge for decades exposing the fact that the subsectors of the nonoil sector making this significant contributions lack the capacity hence a low tax-GDP ratio of around 6 percent and the upward trending of the debt-GDP ratio of 20 percent. It follows that the economic activities in the non-oil sector accounting for the 90 percent GDP operates more in the informal sector. This is because about 60 percent of the country’s GDP emanates from the informal sector that also employs directly and indirectly around 80 percent of the countries’ labour force. This informal sector is yet to be integrated into the mainstream economy thus, the low domestic resources mobilisation-revenue generation. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Prof Eregha is of the School of Management and Social Sciences, Pan-Atlantic University, Lekki-Lagos.

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When will Nigerian lives matter?

Remi Adekoya

remember the first time I saw my father scared. He had come to pick me up from my primary school in Maryland, Lagos and we were on our way home. Just outside Ikeja military cantonment, we had a small collision with another car. I can’t remember who was at fault, I was maybe 10 at the time. But my dad and the owner of the other car started going at it, each blaming the other for the accident. At a point, the other man said he was going to bring his soldier friends from the cantonment, and they would straighten my dad out. Immediately my dad saw the man indeed heading into the cantonment, he sped off. As we drove through GRA, he kept looking in his rear-view mirror, clearly worrying the man might have found his soldier friends and come chasing after us. This was the Babangida-era. I will never forget the fear I saw on my father’s face that day,

and how scared that made me feel. It does something to a boy, the first time he sees his father afraid. My dad was a middle-class architect, so hardly the most vulnerable citizen in society. But he had no “connections” in the military, so the prospect of a confrontation with Nigerian soldiers clearly frightened him. Now imagine the fear a poor Nigerian must feel when dealing with Nigerian policemen or soldiers. Knowing fully well that once you’re not a VIP in Nigeria, you can be manhandled, mistreated and even killed without much fear of consequence. Because only VIP lives matter in Nigeria. The rest of the country is expendable. A black man is murdered by a white policeman in America and the whole country explodes in protests. I know this is because this was hardly the first such incident. But violence against the Nigerian body, including by the state, has become so normalised it is difficult to imagine the same kind of widespread reaction here. Shiites, IPOB members, the list is long, even in recent “democratic” years. Death and violence have no shock value in Nigeria. I sometimes wonder why. Where does this come from? The military-era, many will say. Maybe. That certainly didn’t help. But I think it’s something deeper. Something that goes beyond the experience of military rule. I think the very principle of the sanctity of every human life is one that has yet to capture the Nigerian mind at all levels of society.

We see the protests triggered by the murder of George Floyd in America and we remember all the incidents of police brutality towards black people we heard about or witnessed before. But if we are to be real with ourselves, we also know that as a rule, 21st century America and other Western societies treat far more seriously the idea every human life is sacred than is the case in Nigeria. That’s why when criminals in America feel cornered, they often try to take a hostage. Because they know American police officers will go out of their way to avoid that hostage getting harmed or killed. The whole police playbook is based on the premise they must avoid the loss of innocent life at all costs. So, having a hostage gives the criminal immediate leverage in the situation. Is there anyone who seriously thinks taking a hostage would prevent Nigerian police or soldiers from shooting at you if they wanted to? Human life is not yet truly considered sacred in Nigeria. Of course, everybody pays lip-service to the idea it is, but lip-service and deeply-held convictions are two very different things. I think the more popularlyheld belief in Nigeria is that some lives matter and some lives don’t. You see it when a VIP dies and regular folk seem genuinely moved whereas that same VIP couldn’t give two hoots if that regular person lived or died. I make no claim to be the one who truly cares while others don’t. In fact, growing up in Nigeria, I didn’t

‘ I make no claim to be the one who truly cares while others don’t. In fact, growing up in Nigeria, I didn’t consider every human life sacred myself. I believed the world was divided into important people and unimportant people. I wasn’t born thinking that way, I soaked it in from my environment

consider every human life sacred myself. I believed the world was divided into important people and unimportant people. I wasn’t born thinking that way, I soaked it in from my environment. I get the pressures people face in Nigeria. To survive. To pay their kid’s school fees. Their mother’s hospital bills. It can all be quite overwhelming. Where in all these everyday worries are you going to find the time or energy to think of the tragedies of others? Of the fact others around you are constantly being bullied, beaten or killed. But I also know there is an inescapable truth in the words of Martin Luther King when he said, “Our world hinges on moral foundations.” This is not an abstract intellectual assertion or the to-be-expected-but-not-takenthat-seriously words of a pastor. Human societies are built on ideas of what is just and what is not, what is acceptable and what is not. It is only when a preponderance of people in a society determine that a thing should be this way, and not that way, that it can be so. Nigerian lives will only matter when a preponderance of Nigerians determine that it must be so. Until then, a Nigerian life will continue to mean little if society does not consider you to mean much. Dr Adekoya is a journalist and political scientist. He has written for the UK Guardian, Foreign Policy, Foreign Affairs, Washington Post and Politico among others. He tweets @ RemiAdekoya1

Understanding the social contract (2)

ast week, I dwelt fully on the concept of the social contract and how most Nigerians misunderstand or misinterpret the concept to be disproportionately rights-based – “one that sees itself more as receiving from, and not giving to the public domain,” a situation Jane Guyer describes as “representation without taxation”, an ingenious reversal of the popular American slogan before the revolution. I also gave an example of Norway, a country of just five million people but with an average daily oil production of 1.6 million barrels but which has refused to fund its government with oil wealth but rather instituted one of the highest tax regimes in the world to fund its government and ensure citizenship control and government accountability. For instance, despite being an oil producer, a litre of fuel sells for between $1.5 and $2 currently in Norway - one of the highest in the world. Juxtapose the Norway example with, say Libya, before the fall of Gaddafi. With slightly a higher population than Norway – 6.4 million in 2010, it produces roughly the same quantity of oil as Norway – 1.65 million barrels per day. That is where the similarities ended. In Libya, Gaddafi virtually abolished all taxes, provided petrol and other amenities almost free to its people. In exchange, the government was not accountable to its people. Gaddafi not only personalised power but ran one of the most brutal and repressive regimes in the world that completely denied its people most of the rights other people take for granted. Worse, like most dictatorships, Gaddafi’s Libya for fear of empowering the opposition, refused to create a private-sector driven economy that will create jobs for the largely educated youth in his country. It was

not surprising therefore that at the time of the Arab Spring that swept Gaddafi away, Libya had one of the highest unemployment rates in the world at 30 percent - higher than Nigeria’s 23.9 percent rate at the time. It is clear from theory and practice that there cannot be government accountability where the government is not funded by the people directly and where the people place rights over duty or even makes the fulfilment of duty contingent on the government doing its own part. Even if that country happens to be a democracy, politicians will always deploy resources to buy up the votes of the people or deploy resources to subvert the will of the people. This is exactly why there cannot be transparency and government accountability in Nigeria. Nigerians do not only place rights before duty but have an unhealthy sense of entitlement that makes government transparency and accountability virtually impossible. In 2012, Nigerians, complete with all the organised labour unions and civil society, thronged to the streets in unprecedented protests and revolt to force the government to restore the subsidy on petrol gulping between $10 and $13 billion yearly – dwarfing the government’s combined spending on education, health and infrastructure. The cry then was that subsidy was not Nigeria’s problem but corruption. Sadly, this disingenuous campaign where poor Nigerians were seduced to protest against their true interests, was led by the so-called progressive minds and politicians in the country. Jonathan – and it is assumed corruption also - was defeated in the 2015 elections but subsidy on petrol has remained and has continued to dominate government expenditure. In 2017 alone, it was estimated the government spent over N1.4 trillion on

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petrol subsidy. What rational and sensible government could afford to leave millions of its citizens in poor health, ravaged by avoidable diseases such as malaria, yellow and Lassa fever, cholera, typhoid etc and with completely broken down education infrastructure while it continues to spend billions of dollars and trillions of naira yearly to subsidise consumption of petrol by the rich and the middle class? The reason is not so obvious but rooted in the political system. Most African postcolonial regimes have not made any effort to broaden the social base of state power and had to concentrate on capital cities and urban centres where opposition to their rule is most likely to come from. They impoverish the rural areas to keep the cities happy. They impose price controls on rural farmers to keep foodstuffs cheap in the cities. They provide transportation, petrol, electricity, and foreign exchange subsidies to keep the few middle class and city population happy or calm. In Nigeria where the riches of the state flows from the ground and not from the people, it is in the interest of politicians to keep the usually loud and restless middle class happy and prevent revolts. That is why despite all statistical indices pointing to the ruinous subsidy regimes, successive Nigerian governments will continue to provide petrol, electricity and foreign exchange subsidies to the few middle class principally to keep them happy and prevent revolt even if it means bankrupting the entire country in that regard. In fact, the subsidy even extends to pilgrimages to Saudi Arabia and Israel. That is why there are always strikes anytime an increase in fuel pump prices is announced. Not a few keen watchers of political events in Nigeria also believed Goodluck Jona-

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CHRISTOPHER AKOR

than’s fate was sealed in January 2012 when he announced the total removal of petrol subsidy. Current events also lend credence to this theory. Faced with collapsing oil prices and the fallout from the Covid-19 pandemic, the Nigerian government would rather slash healthcare and education budgets than touch the frivolous demands of members of the National Assembly. In the revised 2020 budget, the government slashed the basic healthcare budget from N44.4 billion to N25.5 billion and the budget for the Universal Basic Education (UBE) budget from N111.7 billion to N51.1 billion. But in a surprise move, it approved N27 billion for the renovation of the National Assembly complex – an amount far higher than what was utilised to build the edifice according to a civil society group tracking government expenditure. It is abundantly clear from the Nigerian government’s move that the people do not really matter regardless of the rhetoric to the contrary. Those that matter are the critical groups that have the powers to derail the government or the wherewithal to create chaos – and all these are being systematically taken care of even if it is at the detriment of the country’s healthcare and education infrastructure and the long-term viability of the country.

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Editorial Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya

DEPUTY EDITORS John Osadolor, Abuja Tayo Fagbule NEWS EDITOR Chuks Oluigbo MANAGING DIRECTOR Dr. Ogho Okiti EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai COPY SALES MANAGER Florence Kadiri DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

Democracy in Nigeria: Of, for and by the big man

Bigmanism keeps Nigeria hovering around authoritarianism

omorrow, June 12, Nigeria will celebrate Democracy D a y, t h e s e c o n d since President Muhammadu Buhari changed it from May 29. As expected the President will give a speech listing the benefits of democracy in Nigeria, especially under the APC, his party. He will no doubt mention how his party through the democratic process won electoral victory in 2015, the first democratic transition in the country. Beyond the plaudits we will hear tomorrow and for the better part of this week, it’s important to ask: What kind of democracy is Nigeria? The Economist Intelligence Unit which has published the Democracy Index every year since 2011, groups countries into four types of regimes: full democracies, flawed democracies, hybrid regimes and authoritarian regimes. Nigeria, according to the index, is a hybrid just above authoritarian regimes. Elections in hybrid democ-

racies are hardly free and fair, opposition is suppressed, corruption is rife, rule of law weak, the judiciary remote controlled, dissent is frowned at and harassment of journalists is common. All of which describe Nigeria. Whether under the APC or the PDP the difference has been in degrees. What they have in common and the major wahala with democracy in Nigeria is the big man political system. In political science the term “big man” is used to describe a structure that formally, on the outside, has what it takes to function as a democracy: a constitution, an executive, legislative and judiciary, and, of course, regular elections. All of these are a screensaver for patronage networks that, informally, control the inner workings of the state. Personal interest, how to control and distribute the benefits from being in power is the number one concern of the big man system of politics. It is not politics as defined over 2,000 years ago by Aristotle. For the big man politics

is not about what is good for the society, how best we should live, prosper and flourish together as a polis. It is about capturing the state to serve personal interests and rewarding lackeys. It is about frustrating elected and appointed officials from making policies that benefit the common good. What’s happening in Edo and Ondo states is evidence of the big man syndrome, It has seized both APC states. The tussle in Edo is even more shocking. Adams Oshiomole, chairman of APC and predecessor of Governor Godwin Obaseki, fought bigmanism to become governor in 2008. The APC is undoing, as the story of Oshiomole demonstrates, what would have been a gradual transition to institutions away from political personalities, big men. It will further reduce support for democracy where there is a huge deficit. The supply of democracy, and its dividends, has struggled to catch up with demand. It’s slow, undulating, one-step-forward, two-stespbackward pace is bound to cause disaffection, distrust and can be

disruptive. There is a close link between the quality of elections and the supply of democracy and its dividends e.g. good governance and socio-economic development. Though many Nigerians support democracy the level of satisfaction is waning. Hence, the importance of the elections in Edo and Ondo. It will test whether a track record of performance or patronage is what determines who gets to run forand wins a political position. For a 60 year old, 21 years of uninterrupted democracy is worth celebrating. But our best can’t be in the past: the elections of June 12, 1993 are considered the freest and fairest in the history of Nigeria; it’s the yardstick for every election we have held since then. The political culture of bigmanism must change if Nigeria is to hold any elections as free, fair and peaceful. Either the culture changes or we risk returning to authoritarianism. Will it take another generation (those born in 1999 cast their first vote last year, if they did at all) or can the change begin now?

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Investor Helping you to build wealth & make wise decisions

NSE All Share Index

Week open (29-5–20)

25,267.82

Week close (29-5–20)

25,016.30

Percentage change (WoW)

-1.00

Percentage change (YTD)

-6.80

Market capitalisation

NSE Premium Index

The NSE-Main Board

N13.168 trillion

2,234.86

N13.050 trillion

2,227.98

-0.31 5.28

NSE ASeM Index

NSE 30 Index

NSE Banking Index

NSE Insurance Index NSE Consumer Goods Index NSE Oil/Gas Index

1,048.08

762.45

131.81

424.96

229.09

1,826.64

1,204.70

1,020.88

1,030.84

1,096.28 1,086.24

304.11

762.45

298.62

130.93

426.07

225.22

1,817.83

1,166.83

1,005.15

-1.81

-0.67

-1.64 -10.50

0.00 0.00

-0.92 -7.78

-16.32

4.06

0.26 -28.13

NSE Lotus II

-1.35

-0.90

-14.21

-0.92

NSE Ind. Goods Index

-3.14

NSE Pension Index

-1.54

8.48

-4.64

NSE ‘Fact Sheet’ shows all equity market indexes ended Q1 in negative …though average daily transactions increased by 23.59% Iheanyi Nwachukwu

he novel coronavirus (COVID-19) pandemic caused a severe slowdown in global growth in first-quarter (Q1) of 2020. On the back of aggressive isolation measures and nationwide lockdowns in major economies, the first quarter of the year was characterised by weak consumer demand, steep declines in global oil prices and bearish stock markets. At the NSE, all equity market indexes ended the quarter in negative territory. When compared with its position in Q1’ 2019, the NSE-30 Index decreased by 35.20percent in Q1’20 to 902.37points; All Share Index at 21,300.47 points in Q1’20 represented decline of 31.38percent. NSE Premium Board Index was down by 20.08percent to 1,761.23 points. NSE Main Board Index also decreased by 37.87percent to 882.22 points. The NSE ASEM Index at 734.99 points at the end of Q1’20 dipped

by 8.95percent. Likewise, NSE Pension Index at 826.75 points in Q1’20 decreased by 30.41percent when compared with Q1’19 position. NSE Banking Index at 235.86 points also in Q1’20 decreased by 41.61percent; NSE

EFG Hermes, Cardinalstone, Morgan Capital, other stockbroking firms lead 5 months equities trade Iheanyi Nwachukwu

o fewer than 35.25billion units of listed companies stocks were traded by dealing member firms of the Nigerian Stock Exchange (NSE) in five months to May 31, 2020. The 35.25billion units represent 47.45 percent of total number of shares exchanged same period on the Nigerian Stock Exchange (NSE). The broker performance report shows EFG Hermes Nigeria Limited led other dealing member firms after trading 5.353billion units in five months which represents 7.20percent of the total number of shares exchanged during that period. Also, Cardinalstone Securities Limited accounted for 5.297billion shares or 7.13percent, while Morgan Capital Securities Limited was responsible for 4.91billion units or 6.61percent. Other stockbroking firms that played big by volume include: Stanbic Ibtc Stockbrokers Limited

(4.23billion units or 5.70percent); Rencap Securities (Nig) Limited (4.17billion units or 5.62percent); CSL Stockbrokers Limited (3.63billion units or 4.89percent); and Meristem Stockbrokers Limited (2.45billion units or 3.30percent). Also among the top 10 league of stockbroker that accounted for large chunk of stocks traded in five months to May are: Chapel Hill Denham Securities Limited (1.89billion units or 2.55percent); Coronation Securities Limited (1.77billion units or 2.39percent); and Tellimer Capital Limited (1.52billion or 2.06percent). In value terms, Stanbic IBTC Stockbrokers Limited led others after exchanging stocks valued at N115.14billion or 13.12 percent of the total value of stocks traded during the review period. Stocks worth N527.36billion were exchanged in five months to May 31 by just ten stockbroking firms. The said amount represents 60.08percent of the total value of stocks traded on the Bourse that period. www.businessday.ng

Consumer Goods Index dropped by 54.24percent in 52 week period to 325.50 point. The NSE Insurance Index at 119.40 points in Q1’20 represented 5.22percent decline when compared with Q1’19 position.

Others are: NSE Oil/Gas Index (215.25 points or -25.91percent); NSE Lotus Islamic Index (1,512.63 points or -33.29percent); NSE Industrial Index (1,040.29 points or -16.09percent); NSE Corporate Governance Index (681.85 points

or 44.46percent); NSE-Afrinvest Banking Value Index (610.88 points or -40.07percent); NSEAfrinvest High Dividend Yield (1,123.75 points or -20.32percent); NSE Meristem Growth Index (980.26 points or -36.52percent); and NSE Meristem Value Index (1,091.33points or -21.41percent). Though, trading activities on the Nigerian Stock Exchange (NSE) still increased in Q1 compared with the corresponding period in 2019. The total volume and value of trades increased by 19.78percent and 49.88percent respectively in Q1 of 2020. Despite major gains recorded in January 2020 when it became one of the best performing indexes in the world, the All Share Index closed the quarter at 21,300.47 points, down 31.38percent from Q1 2019. The daily volume of securities traded on the NSE averaged 387.50 million units, while the average daily value of trades was N4.90 billion ($12.69 million). At the end of the quarter, the average PE ratio of The Exchange’s listed equities stood at 23.94, compared to 24.91 in the previous year.

FG restates commitment to investment in solid minerals Iheanyi Nwachukwu

he Federal Government had renewed its determination to expand sources of nonoil revenue, to free Nigeria from over-reliance on income from embattled crude oil, by creating enabling environment for investment in mineral resources and allied products in commercial quantities. Despite over 40 available mineral resources in Nigeria, the sector is currently contributing a paltry 0.5 percent to the nation’s GDP, because the business is largely informal, uncompetitive and dominated by artisans who have to go through middlemen. However, government has projected five percent contribution of the sector to GDP by 2023. Speaking at the virtual launch of Nigeria’s premier Gold company, Dukia Gold and Precious Metal Refining Company Limited’s Raw Materials Purchasing Programme, the Vice President of Nigeria and Head of the country’s Economic Management Team, Yemi Osinbajo, explained that

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in line with Economic Recovery and Growth Plan (ERGP), the Federal Government was ready to leverage more support for development of investment in solid minerals as a source of foreign exchange earnings for the Nigeria. Osinbajo who commissioned the Raw Materials Purchasing Programme Online during a wellparticipated Zoom’s meeting, noted that it was a landmark opportunity for Nigeria to revive the mining sector by standardizing the business and making it easy for the operators to create jobs and contribute to Nigeria’s Gross Domestic Product (GDP). A c c o rd i n g t o h i m, a c t i v e investment in business of gold and allied products would create huge job opportunities for all professionals in the value chains. He commended the promoters of Dukia Gold and Precious Metal Refining Company for the great initiative while he also applauded the project’s financier, Heritage Bank Plc, for supporting the Programme. “The Programme is a landmark opportunity for Nigeria and Africa. It will create employment for the @Businessdayng

entire operators in the value chain at post COVID-19. We shall through our policies encourage emergence of small artisans in the mining business to boost job opportunities and foreign exchange earnings for Nigeria”, said Osinbajo. Responding to him, the Managing Director and Chief Executive Officer, Dukia Gold and Precious Metals Refining Company, Bose Owolabi thanked the Federal Government for its support and pledged to ensure that the Programme becomes operational immediately. Mrs Owolabi, explained that the the company’s initiative was predicated on the need for the private sector operators to support the government in fulfilling its objective of establishing gold refineries in Nigeria. “The objectives of Dukia Gold and Precious Metals Refining Company Limited aim at fulfilling the Federal Government of Nigeria’s objective of ensuring that a Gold Refinery is established in Nigeria as part of the Solid Minerals Road Map beyond Oil Economic Diversification Programme as contained in Economic Recovery and Growth Plan (ERGP) Policy.

Thursday 11 June 2020

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

Nigerian Banks’ Q1 20 profit increases slightly amid regulatory headwinds OLUFIKAYO OWOEYE

welve Niger ian banks grew profit 3 percent in the first three months of the year at N262.1billion from N253.87billion amid regulatory headwinds that have continued to squeeze lenders’ deposits with the Central Bank of Nigeria (CBN) and the impact of COVID-19 in the latter part of the period. Nigeria’s biggest bank by asset, Zenith Bank’s net profit increased slightly to N50.5billion in the first quarter as against N50.23 billion recorded in the same period in 2019. Nigeria’s most capitalised bank, Guaranty Trust Bank’s profit after tax stood at N50.1billion as against in N49.3 billion recorded Q1 2019; Access Bank, Nigeria’s biggest bank by customer base recorded N40.9billion in the first period as against N41.14billion in Q1 2019; United Bank for Africa made a total of N30.1billion compared to N28.66 made in Q1 2019 while First Bank, Nigeria’s oldest bank recorded N25.7billion in profits compared to N15.7billion made in Q1 2019. Other banks such as Stan-

bicIBTC recorded N20.6billion in profits from N19.15billion recorded in the first quarter of 2019; EcoBank recorded a sharp decline in profits to N24.3billion from N30.58billion recorded in Q1 2019; Fidelity Bank recorded decline in net profit at N5.8billion from N5.9billion recorded in the

first quarter 2019; Sterling Bank recorded N2billion in the first quarter a decline compared to N3.2 billion recorded in same period previous year; Union Bank recorded N6billion compared to N5.27billion recorded in Q1 2019; Wema Bank recorded N977million as against N1.1billion recorded

in Q1 2019. The apex bank introduced a minimum loan-to-deposit ratio (LDR) for banks in the country in July 2019, according to the CBN this is to stimulate lending to the real sector and drive economic growth. At the introduction in July 2019, banks were mandated

to maintain a minimum LDR of 60%; however, this was increased to 65% in September 2019. 12 Defaulting banks were later penalised N499.1billion by the bank in October last year, it also debited the banks N600billion for failing to meet the new LDR threshold set by the apex bank, thus depriving

L-R : 4629 and 4630 Oluwatobi Adeniran , assistant brand manager, dairy, Promasidor Nigeria Limited ; Joy Ihimire, caregiver, Love Home Orphanage, Magodo, Lagos, and Olumide Olaokun , assistant brand manager, cereal, Promasidor Nigeria Limited , during the presentation of the company’s dairy products to the orphanage home in commemoration of World Milk Day and commitment to provide quality and affordable nutrition to all Nigerians Pic by Pius Okeosisi

the banks of any interest that would have earned on such deposits. During the monthly Monetary Policy of the CBN, it raised the Cash Reserve ratio of banks in the country by 500 basis points to 27.5percent, cash reserve requirement is the minimum amount banks are expected to retain with the CBN from customer deposits. According to the CBN, the raise became necessary in a bid to tame inflationary pressure in the economy. It, however, wielded the big stick again in April when it debited 28 commercial banks and merchant banks a whooping N1.4trillion for failing to meet the CRR requirement, just last week, the CBN debited some banks a total of N459.7 billion for failure to meet CRR requirement. Going forward, earnings from the Banking industry’s core business is expected to decline in the short term on account of an expected rise in impairment charges, lower yields on the loan book and a contractionary monetary policy stance, exacerbated by discretionary cash reserve requirement (CRR) debits by the regulator.

Wale Odutola becomes new president of PenOp APM Terminals, NRC restore container MODESTUS ANAESORONYE

he Pension Fund Operators Association (PenOp) of Nigeria has elected Wale Odutola as its new president. This was confirmed at its recent bi-annual meeting, where he was elected with other Executive Committee of the Association. Wale Odutola, who is the managing director/CEO of ARM Pension Limited will lead the Association for the next two years, taking over from Ronke Adedeji, the erstwhile president, and CEO of Leadway Pensure Limited. Wale was previously the Association’s Head of Media and Branding prior to this election. Accepting the new office, Wale thanked Ronke for her strong and visionary leadership over the last two years and pledged to continue the work that she and the previous Executive Committee had begun. He further stressed that the focus of the industry under his tenure would continue to be on ensuring wider coverage of the scheme, promoting ethics within the industry, ensuring that the pension industry contributes to national development, greater engagement with the government and regulators and general up-skilling of pension operators. Wale thanked his colleagues for reposing their con-

fidence in him to direct the affairs of the Association at this critical time in the industry’s history. Other members of the newly elected Executive Committee are Akeeb Akinola, CEO of Shell Closed Pension Fund Administrator who was re-elected as the vice president of the Association; Bayo Yusuf, CEO of UBA Pension Custodian Limited who retains his position as the Treasurer of the Association; Eric Fajemisin, CEO of Stanbic IBTC Pension Managers Limited was elected as the head of the Technical Committee of the Association; Amaka Andy – Azike, CEO of Fidelity Pension Managers Limited, as the head of Media and Branding Communications for the Association; and Glory Etadouvie , CEO of IEI Anchor Pension Managers Limited steps in as the head of Legal,

Regulatory and Ethics Committee for the Association. The CEO of the Association, Oguche Agudah, in a statement said that the smooth election is a testament to the sound corporate governance practices of the Association and the cohesion that has been built within the pension community over the recent years. He also said “The new Executive Committee is set to significantly improve the lot of the pension operators, the pension contributors and the economy as a whole. While there are tough times caused by the Covid pandemic, we are poised to contribute our own fair share towards surmounting the current challenges and move the industry and National Economy to greater heights”. The Pension Fund Operators Association of Nigeria (PenOp) is an independent body, established to promote the operations of the pension industry, provide for self-regulation and ensure that international best practices relating to the industry are observed by the operators registered in Nigeria. PenOp Currently has 32 Members, which includes all the 22 Pension Fund Administrators (PFAs), 6 Closed Pension Fund Administrators (CPFAs) and 4 Pension Fund Custodians (PFCs).

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evacuation by rail at Apapa Port

AMAKA ANAGOR-EWUZIE

PM Terminals Apapa and the Nigerian Railway Corporation (NRC) have restored the evacuation of containers by rail from the Lagos Port Complex (LPC) Apapa as part of efforts to decongest roads leading to the port and reduce gridlock. BusinessDay understands that APM Terminals originally restored the rail service in 2013 running three times per week to Kano and Kaduna but was stopped at a point due to technical issues. Speaking in Lagos on Monday, Daniel Odibe, general manager, External Affairs of APM Terminals Apapa, said the terminal and the NRC have developed a new Standard Operating Procedure (SOP), which would bridge communication gap and ultimately lead to more efficient cargo evacuation by rail. According to him, the new SOP was facilitated by the Nigerian Shippers’ Council (NSC). “We wish to thank the Nigerian Shippers Council for facilitating this new Standard Operating Proce-

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dure directed at improving service delivery to shippers and consignees. This is an important milestone for the port. It is something we have always asked for. We want to have a Standard Operating Procedure for receiving trains into the terminal and servicing them. It definitely helps planning when you have adequate information ahead of time,” Odibe said. He said that the resumption of cargo evacuation by rail will help in reducing backlog of cargoes at the port given the closure of a section of the Apapa Bridge for repair works. “Our intention when we constructed the rail line in 2013 and connected it to the national line was to provide alternate mode of evacuation of cargoes to customers. So, coming together to improve on the number of containers that we evacuate by rail line is coming at the best time with the bridge closure. It will take away some trucks from the road,” he added. Jerry Oche, Lagos District Manager of NRC, said that a train is made up of 19 wagons and each of the wagons can take one by 40feet or two by 20feet @Businessdayng

containers. “So, if we are doing 40feet containers, that is 19 trucks off the road and if it is 20feet containers, that is 38 trucks off the road per trip. We are starting with two trips per day and we hope to increase it in no distant time,” Oche said. Ifeoma Ezedinma, director, Regulatory Services of Nigerian Shippers Council, said the new service will help decongest port roads because of the existence of multimodal transport – road, waterways and the train.

CHANGE OF NAME

I, formerly known and addressed as Miss Abimbola Aruna now wish to be known and addressed as Mrs Abimbola Olubodun. All Former documents remain valid. General public please take note.

CHANGE OF NAME

I, formerly known and addressed as Miss Patience Usang Obeten now wish to be known and addressed as Mrs. Amarachi Nora Usang-Nwobodo. All Former documents remain valid. General public please take note.

Thursday 11 June 2020

BUSINESS DAY

cityfile COVID-19: Police intercept 174 bags of marijuana, arrest 4 suspects in FCT INNOCENT ODOH, Abuja

peratives of the Federal Capital Territory (FCT) police command have intercepted a truck carrying 174 bags of dried leaves suspected to be marijuana. The police worked in collaboration with the FCT task force on COVID-19 to enforce the inter-state movement restriction at FCT-Kogi boundary in Abaji, where the illicit consignment was intercepted on Monday. Anjuguri Manzah, spokesperson of the FCT police command said chairman of the FCT task force on COVID-19 and Commissioner of Police, Bala Ciroma while inspecting the exhibits at the FCT

police command headquarters in Garki, praised the operatives for their vigilance. The intercepted truck was transporting the illicit drugs from Auchi in Edo State enroute Zamfara. The suspects used tiles to conceal the illicit drugs from being detected by security operatives, the statement said. The suspects arrested were Muktar Abdullahi, Umar Adamu, Saidu Mohammed and Lawali Suleiman all male. Meanwhile, following the directive by the FCT police commissioner, the suspects and the exhibits have been handed over to the National Drug Law E n f o rc e m e n t A g e n c y (NDLEA) for further investigation and prosecution.

Police recover arms, arrest 22 suspects in Enugu

he police in Enugu have arrested 22 suspects involved in armed robbery, unlawful possession of firearms and cultism. The command also recovered one berretta pistol, eight locally-made firearms, nine rounds of live ammunition, one live cartridge, one motorcycle, 12 handsets, two axes, one dagger, three knives, one laptop, N6,000 and other items from the suspects. Spokesperson of the Enugu police command, Daniel Ndukwe, stated in a report released in Enugu on Tuesday that unknown hoodlums burgled a house at Enugu-Ezike in Nsukka axis and carted away a motorcycle and other unconfirmed valuables. Ndukwe said that police operatives on May 25, at about 2.30p.m arrested three receivers of the stolen goods, including Ejike Ali, 26; Ogili Sunday, 25; and Ukaonu Odoh, 32. “The suspects have confessed to the crime. Further investigation is being conducted by a combined team of Operatives attached to Special AntiRobbery Squad (SARS),’’ he said. Ndukwe said that following complaint received

on May 29 from a victim who was allegedly robbed of N6,000 by some armed men at Obollo-Afor, operatives assisted by Neighbourhood Watch Group, arrested one Agboeze Chukwuebuka, 25, while others escaped. “Two locally-made pistols and the sum of N6,000 were recovered from him. Preliminary investigation reveals that the suspect confessed to the crime and is assisting the police in ongoing investigation at SARS, Enugu,’’ he said. He said that on May 31, at about 7.22 a.m., Eze Ifeanyi and Emeka Okafor, both of Ebonyi State, were arrested by police operatives attached to AmechiIdodo police station while on COVID-19 enforcement duty at Enugu/Ebonyi States border security post. “Preliminary investigation shows that the suspects were intercepted en-route Ebonyi State from Enugu on a Suzuki Jaguar motorcycle with registration number AFK 865 QU. “Following a search conducted on them, one locally-made revolver pistol with five rounds of live ammunition and two mobile phones were recovered. Discreet investigation is ongoing at the state CID,’’ he said. www.businessday.ng

National Association of Nigerian Students (NANS) and National Association of Polytechnic Students (NAPS), protesting against incessant rape cases in Nigeria, in Ibadan .

Muslim community protests against rape in Edo IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

he Muslim community in Edo State led by the chief Imam of Benin Central Mosque, AbdulFatai Enabulele, state chairman of Nigerian Supreme Council of Islamic Affairs, Muhammed Iduozee and the Federation of Muslim Women’s Association in Nigeria (FOMWAN) has protested against incessant rape in the country. The protesting Muslim leaders and faithful, who were at the Government House, state House of Assembly and the secretariat of Edo State council of the Nigeria Union of Journalists (NUJ), called for stringent laws to protect women against rape.

The protesters carried placards with various inscriptions such as, “She wears a hijab, she gets raped. She is 18, she gets raped, she is eight years, she gets raped, she is 28, she gets raped, she is 80, she gets raped. Her age does not matter.” Other inscriptions are, “women are not trash, treat us with respect and honour, say no to rape. Where was your conscience, when she said no, I say no to domestic violence, girl child must be protected, justice for Uwa, and justice for Barakat.” Speaking during the protest, Halima Jibril, the national Amirah of FOMWAN, said mothers and their girl child now live perpetually in fear of being molested, abused and killed. Jibril, represented by Rabi Abiri, Edo State chairman

of FOMWAN, said that rape in whatever form negates religious teachings which preach chastity as an essential requirement for a morally upright family, community and nation. According to her, as Muslim mothers and Muslim youth of the nation, we have watched with extreme concern the increase in the incidence of rape overtime and we observe that it is not limited to the age group or based on the manner of dressing. “This has generally heightened our level of insecurity, even our freedom of movement is being threatened and the dignity of womanhood is being shredded. “This is also working against the education of the girl child as many parents may

not want to support particularly their female children to go to school”, he said. Jibril, however, urged governments to take holistic look at the security apparatus in each state with a view to curtailing rape, banditry, kidnapping, armed robbery, cultism and gang rape. Speaking also, the chief Imam of Benin, Abdulfatai Enabulele, described rape as evil, barbaric and ungodly. “God did not create women to be raped but to be taken care of by men. They are companions; they are not our enemies and those molesting them need to be dealt with. “Rape is evil. Those who raped and killed, they are supposed to be killed while those who rape are suppose to be given life imprisonment.

A/Ibom community raises alarm over armed robbery attacks ANIEFIOK UDONQUAK, Uyo

he people of Ikot Ntuen Nsit and Afaha Nsit in Nsit Ibom local government council of Akwa Ibom State have raised the alarm over increasing cases of armed robbery attacks in their community. They said the armed attackers often come a group of 30 people in the night to unleash terror on their victims and cart away valuable properties. One of the community leaders, who spoke on condition of anonymity for fear of being attacked by the robbers, told reporters in Uyo that the

robbers have visited their community thrice in the last month and carted away belongings, including musical equipment, phones, laptops and accessories. According to him, the armed gangs are believed to have made an uncompleted housing estate outside the vicinity their hideout adding that efforts by the local vigilante group to ward off the attackers have not been successful “Armed robbers have visited us more than three times in the last one month. We have been living in fear ever since. We have formed a vigilante group but they are always overwhelmed by the armed robbers,” one of the commu-

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nity leaders said. He said the community had made representation to the commissioner of police and were assured of protection but regretted that nothing has changed. “We have met with the police commissioner, we brought the issue to the attention of the state government and those in positions of authority by bringing in the news media but there is no let up.” He disclosed that as part of measures to ensure the security of lives and properties in the area, a police post was built by the community but has yet to be completed due to lack of funds and appealed to the police command to come @Businessdayng

to their help. Meanwhile, the state police command says it has arrested 60 suspects over a cult clash which led to the death of two persons in Inen, Oruk Anam local government area. Nudam Fredrick, the police public relations officer, said that 15 suspects have been charged to court for murder while 12 others were charged with murder and cultism. He identified those killed in the cult clash between Debam and Iceland confraternities as Ofonime Uduak (m) and Iniobong Kufre (m), saying the deceased were suspected members of the two cult groups.

Thursday 11 June 2020

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

There is need for many insurance companies to be thinking mergers - Salawudeen Forty years ago, Standard Insurance Consultants Limited birthed for business and has grown to become one of the leading insurance brokerage firms in Nigeria, providing services across the world. Ahmed Olaniyi Salawudeen, president/CEO of the group in this interview with Modestus Anaesoronye shares his experience, success story and future of insurance industry in Nigeria. Excerpt: SICL is a big name in the nation’s insurance and risks management industry and this you have demonstrated in the last 40 years of existence. What has kept you going? ell, what has kept me going is like a slogan of a bank: I keep to my word. My ‘A’ is ‘A’ and won’t come back later and say it has changed to B. And because of that when people are coming to me they know that they are going to hear the truth from me. Again, with modesty, my humility and maturity too has helped over the years in this business. So I try to live above board, maintain integrity in whatever you do. I try not to be selfish. With that, things will come to you easily without struggling for it. Finally, if I have the means, I try to help my fellow human beings. Running a successful business in Nigeria is an arduous task but at Standard Insurance Consultants Limited (SICL), we started 40 years ago on a very sound foundation. The basis of the foundation is as follows: Trust: Trust in business is very important and is a key to success particularly in the Insurance Industry because insurance is an intangible product. Therefore, trust is very essential. As a matter of fact, the foundation of the Insurance business is based on the principle of Utmost Good Faith (Uberrimae Fidei). The second is Integrity: This is also very important because based on your integrity; people will trust you in handling over their Insurance businesses to you. This we have maintained over the last 40 years and it has assisted the Company tremendously. Now, the third point is selection of underwriter/risk carrier: As a matter of interest, our foundation is also based on this criterion assuring that any risks passed to us to provide Insurance Cover is arranged with a Reputable Insurance Company that in case of an insured event, claims are promptly settled. Therefore, the selection of a financially sound underwriter/ risk carrier that will be able to pay claims as at when due is very essential. To this end, SICL pays so much attention in carrying out due diligence on the selection of Risk Carriers/Underwriters from the beginning of our business cultivation. Finally, is the remittance of premium to risk carriers/underwriter: We also ensure that premiums paid to us by our clients are remitted to the insurance companies as soon as same is collected notwithstanding the 30 days of grace stipulated by the Insurance Act. With the above criteria, we have been able to run our business effectively, and happily our business retention as of today is about 95 percent. As a Brokerage Company, let us into your role in the industry and how much brokers have played this role in contributing to the growth of the sector? Generally, to my assessment, the provision of using insurance brokers as intermediaries by the public in Nigeria is still very far behind. The services being provided by the brokers are still not well known probably because of perception or misinformation. Therefore, I believe that the insurance brokerage fraternity will have to do a

Olaniyi Salawudeen

lot more with the present awareness of the benefits associated with the usage of professional brokers’ services in the industry. Simply put, by practice, insurance brokers will not take fees from their clients, rather brokerage commission is paid by the risk carriers/ underwriters with whom insurance business is placed. This doctrine has been in practice over centuries and I feel the broker’s fraternity need to make this well known to the generality of the public in Nigeria. We should let them know that the insured is not losing anything by going through the medium of an insurance broker. In reality, the benefits to be derived by the public in arranging their insurance requirements through a qualified professional insurance broker are enormous. For example, the public will benefit from paying equitable premiums for the risks being carried by underwriters, and not only that, the responsibility of collecting claims from the underwriter’s lies largely with the broker. In the circumstances, I think the Nigerian Council of Registered Insurance Brokers (NCRIB), the umbrella of insurance brokers should continue on a positive note to explain this to the general public, particularly moving forward in the area of life insurance cover which is very important to the economy of Nigeria. The brokers are friends of the insuring public and their role should be seen as a symbiotic relationship between the insured and the intermediary. The insurance industry is currently going through a recapitalization exercise, how relevant is this project and how can it help the business? This is a very topical issue in the insurance marketplace and surely anybody in the insurance business must be highly capitalized. Therefore, the idea of recapitalization will help Nigerian insurance industry. As at the moment, some of the insurance companies are not adequately capitalized and in the circumstances, www.businessday.ng

there is a need for many insurance companies to be thinking of mergers. That is to say, all the small-sized companies should come together and form a united front to be highly capitalized. For your information, in the early days of insurance in Nigeria, the insurance companies are at the forefront of investing their insurance funds with the Banks. Simply put, the banks rely so much on the investment being provided by the insurance companies. First and foremost, the premium being generated on a countrywide need to be invested in one form of investment or the other, and this is done through the banks. The idea is if the fund is provided to the Banks, the Bank will be able to lend the fund at a reasonable interest rate to the public i.e those who are in the communication, housing, industries, and other various infrastructural developments. Nigeria Government and others have been talking about the “Housing for All” scheme by the year 2000. The idea is that if the insurance companies provide funds to the Bank, the Bank will provide these funds with reasonable interest particularly to the mortgage banks. I remembered there was a special mortgage bank put in place by the Government for this purpose long before the year 2000. However, it appears like any other thing in Nigeria, everything is now history. Therefore, the recapitalization of insurance companies appears to be very important and in the right direction. It will be beneficial if the insurance companies and the banks play their role as it is being done in other civilized societies around the Globe. Nigerians will be better off if things are done properly. Does this same recapitalization affect brokers, and what is your company doing about this? For your information, brokers provide insurance professional services and they do

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not require high capitalization as they do carry any Risks. What is very important in brokerage business is the employment of qualified professional insurance personnel that will be a good technician in the interpretation of policy terms and conditions. From our Company’s point of view; what we have put in place is adequate Professional Insurance Indemnity (Error and Omission). This means that we have sufficient insurance cover in place so that in case we provide wrongful advice to our mutual client whereby they suffer losses and they are unable to collect their legitimate claims, we can be sued for professional negligence. As far as SICL is concerned, we are having over a billion naira insurance protection from a very strong, reliable, and highly capitalized financial risk carrier/underwriter. That is all we need as a professional brokers. What would you say about the attitude of Nigerians towards insurance in the last 40 years? This question is very important judging by the attitude of the insuring public over the last 40 years that we have been involved in insurance placements. My honest assessment and opinion as an independent gladiator is that there is not much improvement in the acceptability of insurance in the country’s insurance marketplace. The reason is very glaring. The public perception towards the way insurance business is being conducted in Nigeria is such that Nigerians do not have confidence in taking an insurance cover. The perception of Nigerians (with respect) is that insurance business in this Country is a “Legalized Robbery”. incidentally, this is not so. As I said earlier, insurance business is an intangible product based on trust. Therefore, when a client who has paid his or her legitimate premium and is unable to be compensated claims wise, such a person will be dejected and disgruntled. From my point of view, insurance image generally has not helped matters in the development of Insurance particularly with the life Insurance policies. From my experience over the last 40 years, the public appears not to trust insurance companies because of the happenings in the marketplace. I believe many are perceptions, and some are real. However, this can be avoided by going through the channel of a professional insurance broker that can read the “small print” of the insurance policies so that it can be interpreted logically in the best interest of the assured. In addition, if effort is geared to improve the image of Nigeria insurer, I strongly believe that there will be a lot of Nigerians who will agree that insurance is a better solution to the inherent risks that abound everywhere. My advice as always is that all the arms of the insurance industry in the country; starting from the Regulator, the Risk Carrier, the Intermediary fraternity, the Education Sector, and others should come together as a block to put in place a blueprint that will ensure the improvement of insurance image in Nigeria. I believe the issue of image is very important and critical. Certainly, it is a yardstick for us to move forward in the insurance industry.

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18 BUSINESS DAY

Thursday 11 June 2020

FINANCIAL TIMES

World Business Newspaper

OECD warns of deepest economic scars in peacetime for a century

Rich nations forecast to struggle to recover from coronavirus pandemic impact CHRIS GILES

ich countries face a disappointing economic recovery from the historic downturn caused by the pandemic, which will leave deeper scars than any peacetime recession in the past 100 years, the OECD has warned. In a downbeat set of forecasts, the international organisation said on Wednesday that although developed economies were likely to experience a rapid initial bounceback from the recession, it would probably fall far short of bringing living standards back to their prepandemic level in early 2020. The forecasts paint a far gloomier picture of the next few years than global equity markets, which have recovered sharply from their March lows as investors take a much more upbeat view about global prospects. Laurence Boone, chief economist of the OECD, said the economic impact of coronavirus on unemployment, corporate bankruptcy and adjustments to normal life forced by social distancing would be large and would prevent a normal economic recovery from recession. “Most people see a V-shaped recovery, but we think it’s going to stop half way,” she said. “By the end of 2021, the loss of income exceeds that of any previous recession over the last 100 years outside wartime, with dire and

People who lost their jobs wait in line to file for unemployment benefits in Fort Smith, Arkansas, US. © REUTERS

long-lasting consequences for people, firms and governments.” If the world avoids a second wave of Covid-19, the global economy is likely to contract by 12 per cent in the first half of 2020 and by the end of 2021 it will still be below the level it reached at the start of 2020, the OECD said. The cumulative economic hit by the end of next year would be more than 6 per cent compared with the OECD’s forecast last November. “When you reopen the sectors that can function nearly normally, then you obviously get a surge in activity, but because the virus is prevalent elsewhere or is not eradicated in our countries, then some borders remain closed,

some mobility will be hampered and some sectors cannot function like entertainment or mass gatherings,” Ms Boone said. In a more pessimistic scenario, the OECD warned that a second wave of the virus this winter would knock 10 per cent off output by the end of next year, compared with its previous forecasts. The OECD predicts a 6 per cent contraction in 2020 for the global economy, followed by a 5.2 per cent rise in 2021 — a much worse global crisis than the forecasts published by the IMF in April. It predicted the global economy would contract by 3 per cent this year followed by a 5.8 per cent bounce in 2021 which would re-

cover most of the lost ground. While all advanced economies have been hit by the pandemic, there are likely to be substantial differences in performance depending on how well nations perform in dealing with the virus, according to the OECD. South Korea, which has implemented effective testing, tracking and isolating of coronavirus cases, is expected to contract by only 1.2 per cent in 2020, followed by growth of 3.1 per cent next year. By contrast the UK will suffer the largest contraction this year, with economic output falling 11.5 per cent followed by a 9 per cent rise in 2021, the OECD said. The US is likely to contract less

than the eurozone, with output in the two most powerful advanced economies dropping 7.3 per cent and 9.1 per cent this year respectively. This is likely to be followed by growth of 4.1 per cent in the US in 2021 and 6.5 per cent in the eurozone next year. Ms Boone praised countries for the “blanket” support provided by fiscal and monetary policy as the pandemic struck but said it was now time to think about a more “targeted” and “flexible” approach that encouraged people to move into new sectors to find jobs to replace the ones that would disappear. “We shouldn’t repeat the mistake of the financial crisis and withdraw fiscal policy support too quickly,” she said. But once the economic outlook was clearer in a few years, she added, “then we will have to look at the [accumulated government] debt and more than anything the progressivity of the tax and benefit system because this crisis is widening the differences between people”. The OECD lamented the rupturing of trade links in the crisis and urged countries not to turn their backs on globalisation if they wanted to enhance the prosperity of their populations. “Global co-operation to tackle the virus with a treatment and vaccine and a broader resumption of multilateral dialogue will be key for reducing doubt and unlock[ING] economic momentum,” Ms Boone said.

EU states warn Brussels of hard Brexit risk to coronavirus plans Ireland and Belgium urge bloc to prepare for double blow from UK no-deal exit and pandemic SAM FLEMING AND MEHREEN KHAN

U member states including Ireland are urging Brussels to take into account the shock of a hard Brexit in addition to the pandemic in its response to the bloc’s gravest postwar economic slump. Diplomats from Ireland and Belgium have said in recent discussions addressing the bloc’s budget and €750bn recovery fund that they could be doubly hit by the UK’s no-deal departure from the EU and the economic fallout from the pandemic. Their interventions are complicating already fraught discussions over the bloc’s co-ordinated response to the devastating impact of restrictions implemented to combat the spread of the disease. The eurozone economy is predicted to shrink 8.7 per cent this year — a record postwar recession. Ireland and Belgium rank among the economies that would be hard hit by a sudden disruption to trade with the UK in 2021. The prospect of a no-deal Brexit has

Margrethe Vestager puts on a face mask while sitting behind Ursula von der Leyen in the European parliament. Smaller economies fear the impact of a sudden disruption to trade with the UK in 2021 © Bloomberg

come into view as talks between the two sides have stalled in recent weeks. The UK is due to exit its postBrexit transition period at the end of the year and the British government has insisted it will not seek a negotiating extension. Since March, UK and EU negotiators have led four rounds of talks that have resulted in little progress. With six months to go until Britain’s Brexit transition www.businessday.ng

period expires, there are growing concerns over a messy no-deal departure. At an EU diplomats’ meeting last week, Belgium argued that the European Commission’s recovery fund proposals did not take sufficient account of the economic threat posed by Brexit. Ireland indicated that a Brexit shock might need to be factored into the EU’s broader debate on the recovery

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fund and forthcoming seven-year budget, diplomats said. Their pleas come as member states also complain that the commission’s planned recovery fund allocates money to member states according to a backward-looking set of economic indicators, rather than reflecting the actual economic fallout from pandemic-induced lockdowns. The Netherlands, Denmark, Austria, Belgium, Ireland, Lithuania and Hungary have all questioned Brussels’ proposed methodology on the basis that it has no direct connection to the pandemic. Among the other questions being debated by member states are the conditions attached to the recovery fund, as well as the balance between the handout of grants versus loans. EU leaders are expected to discuss the proposals at a video conference summit next week, with the hope of settling a deal this summer. The debate is heightened because the bulk of the recovery funding could be distributed only long after the pandemic, limiting @Businessdayng

the near-term boost. Research published on Wednesday from Zsolt Darvas of the Bruegel think-tank shows that three-quarters of the money will be released only from 2023 onward. The commission estimates that 60 per cent of the money from its proposed €560bn Recovery and Resilience Facility — a central plank of the recovery package — will be committed to member states by the end of 2022, with actual payments taking longer to disburse. The facility requires member states to submit detailed plans for economic reform to the commission in return for the financing. “Though well-functioning financial markets can help bridge the gap between the urgent spending needs and later EU payments, further efforts are needed to frontload EU payments,” the Bruegel note warns. Under the commission’s current RRF allocation criteria, Italy, Spain, France and Poland are on course to be the biggest recipients of grants. Belgium and Ireland are due to receive much smaller shares of the funding.

Thursday 11 June 2020

BUSINESS DAY

COMPANIES & MARKETS

EU urged to tackle insolvency laws for unified capital market Banking system alone cannot pull region out of Covid crisis, expert group warns JIM BRUNSDEN AND PHILIP STAFFORD

russels will need to tackle Europe’s fragmented insolvency laws and create more uniform shareholder rights if it wants to build deeper capital markets and speed up its economic recovery, an official expert group has warned. The group, led by former eurogroup chief official Thomas Wieser, said on Wednesday that previous EU attempts to build a unified capital market through legislation had fallen short, while Brexit and the Covid-19 pandemic had made the project more urgent. The European banking system alone could not provide sufficient credit for the EU economy to recover from the crisis, the report warned. Authorities have long pushed for companies to use capital markets to fund their growth and become less reliant on borrowing from banks. Nearly 90 per cent of funding in 2018 came from bank lending, according to the Association for Financial Markets in Europe. Attempts to build a more harmonised Europe-wide market have often foundered on sensitive issues such as local

bankruptcy laws. The forum of 28 executives, experts and scholars provided a series of “game-changing” recommendations for EU legislators. They included setting up an EU-wide register of listed company information to be accessible by potential investors, and loosening rules on research for small and medium-sized listed businesses. The challenge of building a large, US-style capital market has bedevilled successive ad-

ministrations in Brussels, with the cause becoming more urgent down the years as first the financial crisis, then the eurozone sovereign debt crisis strained banks in their traditional role as the overwhelming provider of credit to the real economy. The issue has become more acute since the departure of Europe’s largest capital market, the UK, in January, with British politicians signalling they would diverge from Europe’s rules to remain competitive.

“The current financial system which is too bank-centric represents a major bottleneck for the EU economy going forward,” the expert group report, commissioned by the EU, warned. Representatives on the forum included Lorenzo Bini Smaghi, chairman of Société Générale; Stéphane Boujnah, chief executive of Euronext; Leonique van Houwelingen, chief executive of BNY Mellon’s European arm; and Sylvie Matherat, the former chief regulatory officer at

Deutsche Bank. It also called on Brussels to change the rules to harmonise some non-bank corporate insolvency laws, so shareholders had uniform rights throughout the bloc and certainty about those rights. Other parts of the plans included revisiting steps taken by the previous European Commission and going further, notably when it came to easing regulations so as to revive the market for securitised debt, and tweaking prudential rules to spur equity investments by banks and insurers. But the group acknowledged that it was irrevocably split on the key question of whether to back the creation of a single, centralised, capital markets supervisor, and its report did not make a recommendation on that issue. While some members of the forum argued that a central supervisor “would entail a risk of duplication of responsibilities”, others, including Mr Wieser himself, considered that the step was “essential to building a truly integrated and efficient EU market for capital”, the report said. The commission on Tuesday said it would consult on the proposals before coming forward with an action plan in the autumn.

Nasdaq flirts with 10,000 as Trump hails market rally Cautious trading in US stocks ahead of Federal Reserve monetary policy update HARRY DEMPSEY AND HUDSON LOCKETT

S stocks wavered and the tech-heavy Nasdaq Composite index broke through 10,000 while investors awaited the Federal Reserve’s monetary policy meeting. The S&P 500 opened 0.2 per cent higher before moving into the red, but the tech-heavy Nasdaq Composite maintained its three-month rally in early trading, setting a new intraday record before falling back into four digits. The dollar slipped to its lowest level in three months. Donald Trump tweeted before the market opened on Wednesday: “Nasdaq hits all-time high. Tremendous progress being made, way ahead of schedule. USA!” Equities in Europe trimmed earlier gains, after a downbeat forecast of the economic recovery from the pandemic in advanced nations by the OECD. London’s FTSE 100 gained 0.3 per cent and the Euro Stoxx 600 edged 0.2 per cent higher. Global stocks have rallied since late March, with the Nasdaq soaring about 45 per cent and the S&P 500 all but erasing its losses for

the year. Investors are looking to the Federal Reserve’s monetary policy decision on Wednesday. Economists expect that interest rates will be kept on hold at near zero but have warned that any hesitation over its willingness to dish out support measures could hit markets. When the Covid-19 crisis gripped markets this year, the Fed took extraordinary steps to cushion the financial blow and soothe market disruptions. That has helped global equity markets to stage a powerful rally, defying threats from a resurgence in US-China tensions www.businessday.ng

and the risk of lasting economic damage. “Fed chair [Jay] Powell is similarly expected to reaffirm the downside skew of economic and market risks, the expectation of easy money as far as the eye can see, and the willingness to take policy as far as is needed to generate recovery,” said Steven Englander, head of North America macro strategy at Standard Chartered. “This is dovish, but widely expected.” The bull run in stock markets contrasts with a chorus of downbeat economic forecasts. The OECD was the latest to warn on

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Wednesday of the lasting impact of coronavirus. The Paris-based group said rich countries faced a disappointing recovery from the historic downturn, which would leave deeper scars than any peacetime recession in the past 100 years. There are some concerns that signs of economic improvement in the US, following an unexpected rise in employment of 2.5m people in May, could push the Fed to hint towards weakening its stimulus measures. “There is a degree of uncertainty whether the Fed considers the improvement in data as an opportunity to signal a less loose policy and thus take the liquidity punchbowl away from markets,” said Chris Turner at ING. But “we expect the Fed to err on the side of caution given the uncertainty about the recovery”, he added. The Fed is expected to release US economic forecasts, updated for the first time in six months. In currencies, the dollar index fell to its lowest level in three months, slipping a further 0.4 per cent against a basket of currencies, @Businessdayng

partly due to expectations of the Fed’s monetary policy remaining accommodative. Sovereign bonds were steady ahead of the Fed’s decision, with the 10-year US Treasury yield, which moves inversely to price, at around 0.8 per cent. In Asia-Pacific, Japan’s benchmark Topix closed 0.2 per cent lower while Hong Kong’s Hang Seng and Australia’s S&P/ASX 200 were almost flat. China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks shed 0.2 per cent after an official inflation reading for May showed that producer prices contracted by a greater extent than economists had forecast. In Hong Kong, shares in Cathay Pacific were volatile a day after the city’s government said it would take a stake in the struggling airline as part of a HK$39bn ($5bn) rescue plan. Shares initially surged 19 per cent before paring gains to close down 1 per cent. Oil prices fell, with international marker Brent dropping 1.6 per cent to $40.52 a barrel. US marker West Texas Intermediate slipped 1.8 per cent to $38.23.

Thursday 11 June 2020

BUSINESS DAY

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Debate on the constitutionality of virtual hearings quite revealing - JOKPA UTAKE … A look at the Judicial interpretation of constitutional provisions: Revisiting Udeogu v. F.R.N.

or any keen observer, the debate in the Nigerian legal community on the constitutionality of virtual hearings has been quite revealing. Like most other intellectual arguments, there are two principal sides to the issue – those who contend that virtual hearings can be publicly accessible to satisfy the requirements of s. 36 of the Constitution and those who maintain that only an amendment of the Constitution can accommodate virtual hearings. However, this piece does not weigh in on the debate and the reasons for this reticence will (hopefully) become clearer shortly. One of the arguments advanced by the “anti-virtual” camp is that virtual hearings are likely to suffer the same fate that befell s. 396(7) of the Administration of Criminal Justice Act (ACJA) in the recent decision of the Supreme Court in Udeogu v. F.R.N. The reference to Udeogu is curious because the case had no connection with the constitutionality or otherwise of virtual hearings. Closer scrutiny of the argument will however reveal that the point being made is that cases like Udeogu indicate an increasing tendency of the Supreme Court to narrowly, restrictively and sometimes, simplistically, interpret constitutional provisions. To be fair, this is a reasonable assessment of recent jurisprudence emanating from the Supreme Court and it is simply uncharitable to include those who cite Udeogu on this issue among the infamous band of practitioners who cite authorities out of context.

In the absence of any direct authority on a point, it is good lawyering to discern potential judicial disposition from notable cases. This is precisely what those who cite Udeogu in a debate on virtual hearings have done. What they have however failed to do is to interrogate the approach to constitutional interpretation that has produced decisions like Udeogu. In the opinion of this writer, the debate in itself, particularly the reference to Udeogu, reflects a more fundamental issue with judicial interpretation of the Constitution especially in recent years. It is for this reason that this article critically discusses the Supreme Court’s approach to the issue raised in Udeogu. Reasoning and Decision in

Udeogu The issue in Udeogu involved constitutionality of s. 396(7) of the ACJA which purportedly permitted High Court Judges who have been elevated to the Court of Appeal to “continue as High Court Judge[s]” only for the purpose of concluding any part-heard criminal matter pending before such Judges at the time of their elevation. The provision is expressed to operate “[n]otwithstanding the provision of any other law to the contrary.” As rightly pointed out by the Supreme Court, the notwithstanding stipulation cannot validly include a provision of the Constitution. This equally means that the ACJA provision can only be unconstitutional if it is found to be inconsistent with a provision of the Constitution.

While it is clear that the Supreme Court unanimously declared the ACJA provision unconstitutional, it is not quite clear which specific provision of the Constitution was found inconsistent with s. 396(7) of the ACJA. In the lead judgment of Eko, JSC, the ACJA provision was said to be inconsistent with s. 290(1) of the Constitution. The contributory opinions, particularly that of Kekere-Ekun, JSC, appeared to revolve around sections 250(2), 253 and 290 of the Constitution. Citing its previous decisions in Ogbunyinya v. Okudo (1979) NSCC 77 and Our Line Ltd v. S.C.C. Nigeria Ltd (2009)17 NWLR (pt. 1170)383, the Court concluded that the ACJA provision is unconstitutional because “a Judge elevated to a higher court cease[s] to be a Judge of the court from which he was elevated.” In arriving at its conclusion, the Court alluded to the President’s power to appoint Justices/Judges of the Court of Appeal and the Federal High Court under ss. 238(2) and 250(2) of the Constitution respectively. In the same vein, the Court referred to the general appellate jurisdiction of the Court of Appeal under s. 240 of the Constitution. It appears the point the Court wished to make by reference to the composition and jurisdiction of the Court of Appeal is that a Justice of an appellate court such as the Court of Appeal cannot exercise first instance jurisdiction over criminal causes and matters as Honourable Justice M. B. Idris purported to do in this case. The point about the appellate jurisdiction of the Court of Appeal

A Young lawyer’s tale of hope after surviving COVID-19 CHUBA AGBU

amilare Ojo is a Young Lawyer and an Abuja Resident, who recently recovered from the COVID-19 Virus. He recounts his experience and offers hope to those who are currently afflicted with the deadly Virus. His ordeal began on Saturday the 9th of May when he developed feverish symptoms which progressively got worse overnight. His initial assumption was that is was probably Malaria or Typhoid, a visit to the hospital, however, confirmed that it was neither. Perplexed, Damilare sought advice from a friend who promptly told him to get the COVID-19 test and after a week and a half of waiting, his worst fears were confirmed, he had tested positive. Many Nigerians still view the COVID-19 virus as a death sentence and the untimely demise of the President’s

Damilare Ojo

Chief of Staff, Abba Kyari to the virus only enhanced this perception. Damilare details the intense psychological and mental toll he suffered as his predicament began to dawn on him. It is not unusual for the mind to fixate on all the negative rhetoric and death toll figures that flood our timelines daily but this was eased upon his arrival at

Police Brutality, Abuse and Harassment

INSIDE of Lawyers – Are We Still Partners in the Protection of Law and Order?

the isolation centre. For all the talk that has occurred on social media, criticizing the Federal Government, the Federal Ministry of Health and Nigerian Centre for Disease Control’s efforts combating Covid-19, from poorly equipped isolation centers to a lack of transparency, Damilare’s experience is one that serves as a direct contradiction to these claims albeit, perhaps an anecdotal one. When he was admitted into the isolation center, he too harboured the doubts and fears that many had at the time but was pleasantly surprised by the organisation of the centre. He stated that he was given a private ward, fed properly, treated with respect and dignity and given a wide selection of immune system-boosting drugs. Fortunately for Damilare, his symptoms were mild and while in Isolation he was able to keep up with friends and family, stay active on social media and even perform some professional obligations.

COVID-19: Debt Issuances in a Pandemic

His words, “What shocked me and what caught my attention the most, was the action and response, of the Federal Government. I saw responsiveness, synergy and I saw a government coming together to ensure every COVID-19 patient was well treated”. This he said, was not peculiar to him. In Chronicling the series of events that transpired during the isolation journey, he stated, that he was picked up and was told to provide the contact details of all the people he had been

Remote Work: Practical and Legal Considerations

is however of doubtful relevance to the issue at hand because s. 396(7) of the ACJA did not purport to empower an appellate court to exercise first instance jurisdiction. Indeed, the provision did not empower a judge to exercise first instance jurisdiction in the capacity of an appellate justice; rather the provision sought to allow an elevated Judge of the High Court to “continue as a High Court Judge” for the purpose of part-heard criminal matters. In any event, s. 247 of the Constitution instructively indicates that a single Justice of the Court of Appeal cannot validly exercise any jurisdiction conferred on the Court of Appeal. This can only mean that judicial actions by individual Justices of the Court of Appeal cannot be regarded as an exercise of the Court of Appeal’s jurisdiction – appellate or otherwise. It was therefore, with respect, a mischaracterization to regard Justice Idris’ action(s) as an exercise of jurisdiction by the Court of Appeal. It is indeed remarkable that Eko JSC stated that upon Justice Idris’ appointment as a Justice of the Court of Appeal, His Lordship “had been deprived of whatever jurisdiction he had as a Judge of the Federal High Court.” This statement indicates that His Lordship considered jurisdicContinues on page 22 Jokpa Utake, a legal practitioner, is an LLM Candidate at Osgoode Hall Law School (York University), Toronto and can be reached via email – jutake@ yorku.ca

in contact with in the last two weeks preceding when the result was given to him to which he provided. He was impressed with the efficacy and swiftness by which they reached out to all these people to check up on them, contact trace them and tested those that were eligible for testing. During his stay at the isolation centre agents went to his house and disinfected his house and car without him requesting. Even after being discharged agent still followed up and ensured he was observing the necessary health and safety measures that he was instructed to follow. With other social issues dominating the headlines, and the public becoming increasingly jaded there has been gradual laxity towards the social distancing guidelines, with his story Damilare not only offers hope to those currently afflicted by the COVID-19 virus he also warns others of his belief of invincibility which was summarily dispelled as fate would have it. We all think it can’t happen to us until it does.

Olumide Akpata endorsed as next NBA President, as Lawyers, NBA branches call for his leadership

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Thursday 11 June 2020

BUSINESS DAY

PERSPECTIVES BY OLUMIDE AKPATA

LegalBusiness

Police Brutality, Abuse and Harassment of Lawyers – Are We Still Partners in the Protection of Law and Order?

or the first time in over three months, the biggest news coming out of the West in the past week has not been the COVID-19 pandemic. Instead, it has been news about the senseless killing of an African-American man, George Floyd, by a callous police officer with the Minneapolis Police, Derek Chauvin, who knelt on Floyd’s neck for nearly nine minutes as he groaned and gasped for breath until his death. It is now common knowledge that police brutality is one of the leading causes of death in many parts of the world. And, as correctly noted by the famous South African comedian, Trevor Noah, while the rest of the world continues to battle with the novel Coronavirus, African Americans also have to contend with racism and police brutality. Unfortunately, back home here in Nigeria, the story is the same, if not worse. A week ago, some men of the Bariga Division of the Nigeria Police shot and killed 16-year-old Tina Ezekwe at the Iyana Oworo area of Lagos State, while trying to arrest a commercial bus driver for violating the nationwide curfew imposed by the Federal Government to check the spread of the Coronavirus. This is not an isolated case. Last month, the National Human Rights Commission released a report revealing that during the first two weeks of the COVID-19 induced lockdown alone, there were a total of 105 complaints of human rights violations against security forces in

Nigeria including 8 documented incidents of extrajudicial killings leading to 18 deaths in Kaduna, Abia, Niger, Delta, Ebonyi and Katsina States. It is therefore clear that, in addition to contending with COVID-19 pandemic, the generality of Nigerians have come to terms with the sad reality that they must include police brutality into the long list of their travails, notable amongst which are hunger, poverty, and lack of access to basic amenities. What is more? Nigerian lawyers are not immune to the harsh realities of the times. The last few years have witnessed a wanton abuse and harassment of lawyers by the men and officers of the various security agencies, including the Nigeria Police and the Nigerian Army, with impunity. The result of this is that the respect that lawyers and the legal profession once commanded has become almost eroded. This is unacceptable. In time past, this was simply unthinkable. One recent example in the shameful wave of abuse of lawyers by security agencies is the mindboggling case of Mr. Emperor Ogbonna, an Aba-based legal practitioner. Reports

have it that Mr. Ogbonna was arrested by men of the State Security Services and charged before the Federal High Court, Umuahia with offences bordering on ‘cybercrime,’ arising from a Facebook post from his account on 20 March 2020. After spending 35 days at the Correctional Centre in Umuahia, Mr. Ogbonna was subsequently granted bail which he was in the process of perfecting when he was re-arrested by the State Security Services. To date, there is no credible report regarding the whereabouts of Mr. Ogbonna. We have also heard of instances where lawyers were reportedly detained by the Economic and Financial Crimes Commissions and other antigraft agencies for legal opinions that they issued to, or on behalf of, their clients. What about those who have been detained, harassed and embarrassed merely for applying for the bail of their clients at police stations? I am also aware that, in many instances, when a suspect is in custody, and a lawyer appears on behalf of the suspect, the police on seeing a lawyer becomes hostile, and then frustrates

the suspect in custody with the aim of ridiculing the lawyer and diminishing the need for his services. The list of these aberrations is unending. In every sane society, one key role of the legal profession is to work with the police and other law enforcement agencies in the preservation of law and order, and to ensure due enforcement of laws and regulations. The society thrives better when lawyers and security agencies work closely as partners without rancour and intimidations. But it is rather ironical that those with whom we are supposed to be partners in progress in the protection of law and order and in the criminal justice delivery system have turned against us. As a profession, lawyers need to take a firm stand on this and to insist that enough is enough as we do not know how far this can get. Our voice must be very loud in condemnation and in appropriate cases, our might must be felt. This is the only way we can retain the clout to defend the rights of others: for if a lawyer cannot defend his own fundamental rights against abuse, how can he defend those of others? It is in the best interest of all to put an end to this ugly phenomenon. As lawyers, we lose the respect of clients and the society when we allow injustice to happen unchallenged. As a nation, this sends negative signals to prospective investors about the state of the legal and justice delivery system in operation in Nigeria. As ministers in the temple of justice, lawyers have to remain the conscience of the Nigerian

society and the bulwark against tyranny and oppression. If we fail to carry out this sacred duty, we would not just have failed our founding fathers, but we would also have dashed the hopes of the millions of our compatriots who look up to us to fight against all forms of oppression and check abuse of power. Postscript: The last few weeks have been full of horrifying stories of sexual violence, violation of the dignity of womanhood and other heinous offences against the rights of women. While we were battling with the news of the despicable gang rape of 18-year-old girl, Jennifer, in Kaduna State, we were learnt about the unforgivable rape and murder of Miss Vera Uwaila Omozuwa, who was a student of my alma mater, the University of Benin. We were again confronted by the same rape and murder of Barakat Bello (a student of the Institute of Agriculture, Research and Training, Ibadan); and we have now woken up to the gang rape of 12-year old, Farishina, in Jigawa State. What has gone wrong with us? We must, as a society, check our behavioral pattern and attitude to women and dignity of human person. Those in authority must do all that they can to not only address these issues, but also to ensure that justice is done and that this ugly trend abates.

OLUMIDE AKPATA

To operate a truly deregulated market there must be clarity and predictability of policy - Akabogu In this interview with LEGALBUSINESS, maritime, petroleum and international trade expert, Emeka Akabogu shares some insight on the impact of COVID -19 on the downstream oil and gas industry and discusses recent reform initiatives within the sector. He also shares his experience working remotely, while discussing the role of technology in the world of remote work. EXCERPTS… Continued from last week Is there anything we could be doing to mitigate some of these potential impacts? It will be good at this point to see what some people would call a backward integration. We need to encourage local value addition because there is value accretion resulting from volatility in forex and reliance on foreign variables as far as local dynamics, production and consumption are concerned. Over the years, this has been discussed. But it is time to start actioning our words and intentions. This is a period where we really need leadership, not just politically, but on the economic front. Of course, the economic front requires political backing, so that there is investment in things which matter. Petrochemicals for instance need a lot of investment. But we need the government to create policies which encourage the investors. We also need the market operators to think more as a corporate group as opposed to thinking individually. So, I personally would encourage a lot of mergers and possibly acquisitions, but generally collaborations among market operators in terms of scaling operations and taking advantage of numbers. That way, it’s easier to deal with the challenges which they are faced with. Also, don’t forget that there is a continuing challenge of infrastructure.

Emeka Akabogu

For example, there is a concentration of effort in Lagos as far as infrastructure for the petroleum products market is concerned. There are so many tank farms in Apapa and over the years there have been many complaints that these pose a significant threat to human life in the event of any incident. But yet we have sub-optimal utilization of opportunities on the flanks of the country. However, because government has failed to do what it should do many of the other options have significant constraints that limit them from being optimally utilized. For instance, the Calabar port, which should have been dredged years ago, is constrained by very shallow approaches and this puts a limitation on the size of vessels that can berth there. Consequently, a port that could have served as a very useful window for products to reach www.businessday.ng

other parts of the country quickly and cheaply is not fully taken advantage of. There is therefore a lot of responsibility on the government and in this case NPA to do what they are there for. We need to have a better approach to governance and focus on those things which would drive economic and commercial activities and ultimately help everyone get out of the situation in which we find ourselves. In discussing these issues however, I will always focus on the legal aspects. So, I won’t end this interview, without again calling for, an immediate review of the legal framework relating to downstream markets so that the PIB is passed and the relevant regulatory framework is clear. That way we can have clarity as to what direction the market will go. I read recently, that the IMO recommended a framework of protocols for ensuring safe ship crew changes during the Pandemic. Why is this an important issue, and to what extent has Nigeria been able to comply with this Protocol? Typically, crew on ships have to be changed periodically to safeguard their mental health. They cannot stay on board indefinitely. That is why for instance we know of oil men who go onshore for two weeks and are offshore for another two weeks. However, as a result of Covid-19 and the quarantine measures in place, crew changes are now difficult to implement. In some cases, a ship may not be allowed to enter into a Port and

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even when they eventually get in, the persons on board are quarantined and required to remain on board. The second and perhaps more important issue is that if the crew is able to disembark, they are unable to leave the country or to be replaced by another crew due to the shutdown of the airports. In a nutshell crew replacement has posed a challenge in these times and is affecting the mental health of crewmen. However, the IMO is working with ship owners to resolve the problem, issuing recent guidelines, just as NIMASA has also done. Moving away from COVID-19, it was recently reported that the Maritime Law Association, of which you are Honorary Secretary, constituted a Committee to contribute to the reform of key procedural rules and substantive law in the sector. What’s driving this initiative at this time? Yes. You know, maritime law thrives on uniformity across jurisdictions. However, over the years, decisions coming out of Nigeria courts are out of sync with global expectations and its been a bother to the international maritime community. In addition to that is the fact that the admiralty jurisdiction which was originally constituted with the mindset of ensuring that proceedings are undertaken speedily has seen that mindset significantly eroded over time by procedures and dispositions of judicial authorities and registries. We spoke earlier about losses occasioned @Businessdayng

by delay; those kinds of issues make it expedient that matters should be undertaken speedily. The Nigerian Maritime Law Association is concerned about the considerable accretion of these important elements and has decided to lead the initiative towards reform, so that, where the problem is with the law, the law is changed and where it is with procedure, up to date procedures are put in place. The Association also seeks to undertake sensitization across the bar and the bench to ensure that the important fundamentals which drive the success of any maritime or admiralty jurisdiction are brought back for Nigeria. The Committee that was constituted is made up of great minds and has put in excellent work, so we are on the right track. You are the chairman of OTL Africa Downstream, which is widely acknowledged as the biggest platform for downstream oil & gas businesses in Africa. Given the current situation, what are the plans for OTL this year? OTL will always hold every year, usually in October. For us it is an opportunity to engage the market. The nature of the event this year will be determined by the state of the global society at the time. Our options are open and fluid. But for now, we are planning towards OTL properly and working with our partners to ensure that the event holds in a manner that ensures market needs are optimized.

Thursday 11 June 2020

BUSINESS DAY

PERSPECTIVE

LegalBusiness

COVID-19: Debt Issuances in a Pandemic CHIDI ODOEMENAM

windows of stability. A key step towards preparing for the market is the establishment and registration of shelf programmes by prospective issuers. Issuers with expired debt programmes should also consider renewing expired programmes with the Securities and Exchange Commission to prepare for favourable issuance windows.

t the time of writing, the COVID-19 pandemic has resulted in the death of more than 370,000 people in the world. The rapid spread of the novel Coronavirus has disrupted global economic activity and triggered volatility in the international and local capital markets. The uncertainty occasioned by the pandemic has also adversely impacted investor appetite for securities, including debt products. Notwithstanding the effects of the pandemic, there remains some investor appetite for debt products issued by reputable or relatively healthy issuers with favourable ratings. Recently, two notable Nigerian companies successfully accessed the bond market through debut bond offerings. Dangote Cement Plc’s debut N100 billion series 1 bond offering was 1.5 times oversubscribed. Similarly, Axxela Limited, one of sub-Saharan Africa’s fastest-growing gas and power firms, through a special purpose vehicle issued its N10 billion series 1 bonds which recorded a 15% oversubscription. Preparing for the Market Market conditions are constantly

Chidi Odoemenam

changing as the pandemic situation evolves. As governments implement policies to re-open certain sectors of the economy based on public health guidelines, the capital markets may recover and see an improvement in investors’ appetite for debt products, especially debt products issued by small or mid-sized companies. Improved market conditions may open issuance windows for certain categories of issuers and these entities must be prepared to take advantage of the

Virtual Due-Diligence Preparedness The lockdowns and movement restrictions necessitated by the pandemic have forced companies to implement work from home policies or operate skeletal office services. Issuers must ensure that all documents required for due diligence are accessible through virtual platforms such as data rooms, to ensure a seamless due diligence process for their advisers. The issuer’s team must assess all possible logistical issues related to the conduct of due diligence and address these issues before due diligence. A coordinated due diligence exercise between the issuer and its advisers should also focus on identifying the impacts of the pandemic on the issuer’s business and ratings, to ensure that investors are made aware of the business and financial condition of the issuer.

COVID Disclosure Obligations One of the hallmarks of the capital market is transparency to investors. Given the current uncertainty in the capital markets, investors will require clarity and access to information on the impacts of the pandemic on the issuer’s business to enable them to make informed investment decisions. Issuers may be required to disclose the impact/potential impacts of the pandemic on their ability to fulfil their payment obligations. However, given the constantly changing nature of the pandemic situation, issuers may elect to provide limited disclosure on the potential impacts of the pandemic on their businesses, subject to applicable laws. This disclosure will be typically provided in the marketing documents for the debt offering. Roadshows and Investor Engagement As business meetings have transitioned to virtual meeting software and applications, issuers and issuing houses must adapt to the new reality and ensure seamless roadshows and investor meetings through electronic platforms. However, issuers and advisers must ensure that all possible security challenges associated with virtual meetings are addressed to ensure that confidentiality of information

related to the offering is maintained at all times. COVID Contractual Considerations Issuers and solicitors appointed to advise on debt capital market transactions must pay careful attention to the contractual issues which may arise due to the pandemic. Financial covenants, negative pledges and restrictions on the ability of the issuer to incur additional indebtedness or create security must take into consideration a worstcase COVID scenario to ensure that there is a possible window for the issuer to raise further financing in the event that the pandemic takes a deeper toll on the business of the issuer. In drafting force majeure, material adverse change and termination clauses, issuers and solicitors must also ensure that the triggers and thresholds are reflective of current times. Traditional representations and warranties typically given by issuers must be re-assessed to ensure that issuers do not make misleading representations or warranties. Possible disruptions to payment timelines must be considered and the

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Debate on the constitutionality of virtual hearings quite revealing Continued from page 20 tion as an attribute of individual Judge(s) of a court. This approach is at variance with the constitutional designation of jurisdiction as an attribute of courts in their institutional character. While courts established by the Constitution consist of individual Justices/Judges, jurisdiction and judicial power is vested in courts as a distinct organ of the State and not in individual Judges. In other words, any person lawfully sitting as a Judge of the Federal High Court can validly exercise jurisdiction conferred on that court. Additionally, the reference to the President’s power of appointment was the Court’s way of suggesting that s. 396(7) of the ACJA constitutes an unconstitutional attempt by the National Assembly to appoint a Judge of the Federal High Court. It is doubtful that this is a fair construction of the ACJA provision. The provision clearly envisaged continuation in office by a (duly appointed) High Court Judge who has been appointed as a Justice of the Court of Appeal. The provision cannot apply to a person appointed directly to the Court of Appeal without any prior appointment as a Judge of the High Court. In the same vein, the provision does not necessarily derogate from the President’s power to appoint Judges of the Federal High Court or Justices of the Court of Appeal. In referring to the constitutional provisions pertaining to the composition of the Court of Appeal and the Federal High Court, the Supreme Court did not consider the import of ss. 237(2) and 249(2) of the Constitution. Those provisions empower the National Assembly to prescribe the number of Justices/Judges that constitute the Court of Appeal and the Federal High Court respectively. A judicial consideration of the scope of that power would have provided useful context to the discussion about the constitutionality of s. 396(7) of

the ACJA. The Court also considered s. 253 of the Constitution which provides that the Federal High Court is duly constituted by at least “one Judge of that Court”. The Court reasoned that the Federal High Court is not duly constituted by Judge(s) who had ceased to be of that Court by reason of their elevation to the Court of Appeal. Incidentally, this notion that a Judge ceases to be of the High Court upon elevation to the Court of Appeal was attributed to s. 290(1) of the Constitution. This was materially the same provision (s. 254(1) of the 1979 Constitution) that apparently informed the decisions in Ogbunyinya and Our Line referenced above. Section 290(1) of the Constitution provides that“A person appointed to any judicial office shall not begin to perform the function of that office until he has… taken the Oath of Allegiance and Judicial Oath prescribed in the Seventh Schedule to this Constitution.” While s. 290(1) clearly stipulates when a person appointed to judicial office shall begin to perform the function of that office, it is evidently silent on whether the person so appointed ceases to hold any other judicial office previously occupied. It is therefore unclear how this seemingly unambiguous provision can constitute authority for the view that a Judge appointed to a higher court ceases to be a Judge of the court from which s/ he was elevated. Quite significantly, the view is unsupported by ss. 291 and 292 which specify mandatory/ voluntary retirement or removal as the only means of vacating judicial office. Moreover, nothing in the Oaths Act suggests that taking an oath of office has the effect of vacating a previous office held. To be clear, it is a sensible notion that upon appointment to a higher (or different) court, a Judge should not continue to perform the functions of the court from which s/he was appointed. However, that notion www.businessday.ng

does not necessarily derive from the Constitution and this absence of constitutional entrenchment does not, in any way, affect its reasonability or logical force. It simply means that the notion is not as legislatively inviolable or sacrosanct as a constitutional provision. Thwarted Legislative Objective Judges are unelected and, to a very large extent, unaccountable to the electorate for their decisions. This explains why in a constitutional democracy like ours, statutes enacted by the legislature rank higher than case law. It is also for this reason that the legislature can legislatively overrule judicial decisions by enacting laws to that effect. The judicial power to strike down legislation for unconstitutionality has rightly been described as antimajoritarian and should therefore be exercised with utmost restraint and transparency. Section 1(3) of the Constitution which entrenches the supremacy of the Constitution reflects this cautious approach when it provides that a law that is inconsistent with the Constitution is void only to the extent of its inconsistency. This strongly suggests that a court tasked with determining the constitutionality of any statutory provision must first satisfy itself that the provision cannot validly co-exist with the Constitution before wielding the big stick of striking down. At the very least, the Court must leave no one in doubt as to the provision of the Constitution with which the statutory provision is inconsistent. In Udeogu, the Court acknowledged that s. 396(7) of the ACJA was informed by a noble legislative intention to “ensure speedy and efficient disposal of criminal cases.” This legislative intention is constitutionally justified by s. 36(4) of the Constitution which entitles a person charged with a criminal offence to a fair hearing “within a reasonable time.” To defeat such valid legislative (and constitutional) objective with

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anything short of an express provision of the Constitution is, with respect, a disservice to both the Constitution and the citizenry represented by the legislature. As demonstrated above, none of the provisions cited by the Court suggested or justified the Court’s notion that a Judge appointed to the Court of Appeal from the High Court ceases to be a Judge of the High Court. The problem here seems to be the common perception that Judges are elevated from lower to higher courts whereas the Constitution only refers to appointment of Judges. In the absence of a specific provision of the Constitution to the contrary, it is difficult to see how s. 396(7) of the ACJA is irreconcilable with the Constitution. While Ogbunyinya and Our Line continue to have precedential force in the context of their respective facts, the enactment of s. 396(7) of the ACJA materially alters the premise upon which those decisions were reached. Conclusion It is fitting to conclude with the words expressed by Udo Udoma JSC at a time that is now widely regarded as the golden era of the Supreme Court: “I do not conceive it to be the duty of this court to so construe any of the provisions of the Constitution as to defeat the obvious ends the Constitution was designed to serve where another construction equally in accord and consistent with the words and sense of such provisions will serve to enforce and protect such ends.” – Nafiu Rabiu v. The State (1981)2 NCLR 293, 326 Constitutions, by their very nature, are historical instruments that are meant to serve not only the present generation but also several unborn generations. This enduring characteristic of constitutions enjoins courts to broadly interpret constitutional provisions in a manner that fulfills the framework and principles of government. The current disposition that routine issues such as problems of @Businessdayng

delay in the administration of justice cannot be effectively addressed without amendment of the Constitution is unrealistic and impracticable in a democracy governed by a written and rigid constitution. Constitutions are customarily difficult to alter in order to preserve their organic character as the grundnorm and foundational law of the land. Nigeria’s jurisprudence has been derailed by judicial interpretations that consistently elevate technical and restrictive notions of jurisdiction over and above the actual constitutional function of courts to determine “question[s] as to the civil rights and obligations” of persons. It is crucial for courts, particularly the Supreme Court, to return to this fundamental mandate stipulated in s. 6 of the Constitution. It is therefore in this light that the concerns of those who are apprehensive about the Supreme Court’s disposition to virtual hearings must be understood. The decision in Udeogu is strongly indicative of the Court’s unwillingness to embrace any semblance of radical change to prevailing notions. It appears the Court simply invalidated the ACJA provision on the basis of a widely held notion which, upon closer scrutiny, may not be directly traceable to the Constitution. In this regard, there are few notions that are more prevailing than the notion that the word public in s. 36(4) of the Constitution is synonymous with open court.

Rethinking Legal Education for the 21st - Century Lawyer Read full article on www.legal.businessday.ng

Thursday 11 June 2020

BUSINESS DAY

EMPLOYMENT LABOURINDUSTRIAL RELATIONS

Remote Work: Practical and Legal Considerations in the Employer-Employee Relationship ONYINYE UKEGBU

he International Labour Organization projects that there will be about 305 million jobs lost due to the COVID-19 pandemic. Following WHO social distancing guidelines, most organisations have instituted remote working solutions, or have had to shut down completely. Despite this, the pandemic has also thrown up new vistas of work in various other industries. In view of this, BusinessDay Legal Business and the NBA Section on Business Law, Employment, Labour and Industrial Relations Committee (“ELIR”) launched an exclusive webseries focused on new paradigms in the employment sector. The first in our monthly series themed, “Remote Working as the New Normal: Practical and Legal Realities” was held in May 2020. Ose Okpeku, Chairman, ELIR, sat with Ayodeji Ajibola, HR Director, Diageo; Bina Idonije, Senior Counsel, Labour & Employment, Sub-Saharan Africa, GE; and Lola Esan, Workforce Services Leader, West Africa, Ernst & Young, to discuss some of the prevailing issues. Below, are excerpts. Remote working is any work model occurring outside the typical work environment where the employee is able to connect with critical stakeholders through SMAC (social,

mobile, analytics and cloud) digital platforms. Panelist aver that it is key for stakeholders to be agile, adaptable and innovative as adjustments to remote working post-COVID will require changes on the part of both the employer and employee. Employer-employee relationships are governed by legal and regulatory obligations, and also, the employment contract. However, in these unprecedented times, some changes made by employers have fallen on ungoverned grounds. For instance, some companies have mandated employees to go on leave because they are unable to work productively, remotely, but that is typically not in the employment contract or accept-

able under the law. “Going forward, I see this becoming a standard clause in employment contracts”, Ayodeji Ajibola said of mandatory leave. To make suitable adjustments for remote working post-COVID, organisations must review their contractual obligations, workplace policies and financial costs of employment. For example, most companies’ contracts include details such as resumption and closing times, procedures for clocking in and out, breaks, location, allowances, benefits, overtime, time zone considerations, inter alia. The language governing these must be more flexible to accommodate remote working solutions. They must also reassess Key Performance Indicators

(“KPI”), especially those based on face to face interactions, to be more tangible, measurable and focused on output than activity. While tech companies must continue to develop and improve on tools that help remote working arrangements, “It is important not to think of technology only as ability to access zoom and like platforms. These days the average mobile phone has WhatsApp. Once you have policies to guide how you work in an organisation, you can still achieve some form of remote working with simple platforms.” advised Lola Esan. Employers are advised to examine policies that address issues of the confidentiality of client data and plug, as much as possible, vulnerabilities to cybersecurity. Typically, there is a high and consistent standard of security in the workplace, but each employee’s home is different. They should also aim for clarity on what constitutes an acceptable use of the technology and work tools provided. Employers must also consider the financial implications of remoting working, the most obvious being less investment in office space and more in digital systems and tools like modems, and amenities e.g. fuel costs coverage. However, the work-from-home situation raises other questions on the liabilities of the employer to the employee that in the absence of a condu-

cive legal framework must be resolved contractually such as, how would workplace compensation work? If an employee is injured at home while working, is the employer liable? If the employer defaults on rent, to what extent is the employer liable? “There is going to be, in fact there already is, a blurring of the lines between workplace and personal space, and employees will need to manage their expectations of privacy from the employer. Employers have a vested interest in monitoring productivity especially in cases where the compensation model is tied to the number of hours invested in the work. However, employer’s must be upfront about the monitoring systems implemented and it goes without saying, that they must be within legal boundaries.” – Bina Idonije In preparation for the post-COVID season, panelists agreed that organizations must institute empathetic responses such as employee helplines, employee assistance programs, and counselling. Also, a needs-based assessment of the organisation’s structure is necessary to determine what remains relevant to its goals, as this will enable the organization to rid itself of inefficiencies, which hitherto, have been considered normal. If you enjoyed this article, sign up for our newsletter and follow us on our social media pages for information on the next installment of our web-series.

THEBAR

Olumide Akpata endorsed as next NBA President, as Lawyers, NBA branches call for his leadership

LB Editor everal young lawyers, senior lawyers and branches of the Nigerian Bar Association (NBA) have continued to express interests in the candidacy of Olumide Akpata, immediate past Chairman of the Nigerian Bar Association Section on Business Law (NBA-SBL) and Templars Partner, as the next President of the association. Over the weekend the Oleh

Olumide Akpata

Branch of the NBA unanimously adopted Akpata as its Presidential Candidate for the forthcoming NBA elections, recognising him as a consummate bar man. At the monthly meeting which held on Sunday the 7th of June 2020 and presided over by the chairman, Sunny Adolor, a motion to adopt Olumide Akpata was moved by one of the leaders and elder of the Branch, Elder Joseph Ubogu, a pioneer Registrar of the Delta State University. This motion was seconded by erstwhile chairman of the Branch, Daniel Emebuno. Those who spoke in support of the

unanimous resolution described Akpata as a consummate bar man, unassuming and quintessential gentleman who has the capability and incontrovertible competence to take the Nigerian Bar Association to the next level. NBA Oleh branch cuts across four local government areas of Delta State, namely, ISoko south, Isoko North, Ndokwa West and Ndokwa East. More endorsements…. In the same vein, the Chairman of the NBA Section on Business Law (SBL), Seni Adio, SAN has given his unreserved endorsement to Olumide Akpata “as a very worthy candidate for the Office of President of the Nigerian Bar Association (NBA)”. In a private chat with LEGALBUSINESS, the Principal Partner of Copley Partners said, “I did not take this decision lightly, a heartfelt endorsement of Olu Akpata was an easy decision. I realize that in certain quarters I may be considered to have committed heresy by endorsing Olumide Akpata, and not following primordial instincts (assuming I have them) to endorse a candidate from the “core” South-Western States. “Mine is not to explain why I did not endorse another candidate, but to say that in elections of this nature, the decision that one makes must be guided more by an objective consideration of the current state of the legal profession in Nigeria and a patriotic view of where and how one wants the Nigerian legal profession to be in this competitive 21st century. This consideration made my choice of Olumide Akpata www.businessday.ng

an easy one. Highlighting Akpata’s many leadership qualities, Adio added, “here are some reasons why I strongly believe that OLUMIDE AKPATA is the Man for the Job in 2020: Bold: Olumide is courteous and knows when to demur. However, he takes a back seat to no one. He will be a bold and fearless President of the NBA in defending the Rule of Law, fighting for and advocating the objectives and ideals of the NBA, including holding government and the influential accountable, whenever

Seni Adio, SAN

necessary. Hard Working Ambassador: Olu is extremely diligent and hardworking. Obviously, his diligence and industry have earned him professional and leadership success. In barely 25 years as a Legal Practitioner, he has been at the core of the exponential growth of Templars as one of the largest and leading law firms in Nigeria. Besides his law practice, his broad interna-

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tional exposure and hard work are aptly demonstrated by, amongst others, his leadership roles at different times at the International Bar Association, Nigerian Bar Association and the Section on Business Law. Relaible: He is reliable, consistent and very dependable. I can attest to this having, amongst other interactions, worked with him in various capacities within the SBL. In each of those roles, I have seen the commitment and passion that he brings to work. His tenacity and single mindedness in getting the work done are infectious. Thus, my endorsing him for President is not sentimental, but based on personal experience and, in particular, as a result of working closely together for close to a decade. Mentoring of Young Lawyers: Olu’s support of young lawyers is legendary. Indeed, the vast majority of young lawyers have eloquently voiced their unalloyed support for Olumide Akpata. This is not surprising because Olu’s life as a lawyer in the many years that I have known him has been about development and empowerment of young lawyers as the future of the profession. I have, indeed, witnessed his enthusiastic support for the professional development and economic empowerment of young lawyers. Broad Appeal: Moreover, based on the “new norms” resulting from the COVID-19 pandemic, such as accelerating the need to innovate in order to survive, Olu’s dynamism and progressive attributes are the exact qualities required of the next leader of the NBA. Furthermore, Olu’s appeal and network transcends virtu@Businessdayng

ally all barriers including religion, age, gender, ethnicity, rank or class. Another Senior Advocate of Nigeria (SAN), Ama Vemaark Etuwewe SAN earlier this week, also announced a firm belief in the abilities of Olumide Akpata to lead the bar. According to him, Olumide’s drive for excellence was second to none. “The NBA presidency for Olumide Akpata is a thing we must all strive to achieve if we must have the NBA we all yearn for. I am convinced beyond measures that giving him the mantle of leadership of the NBA at this time will not only transform the NBA and the legal profession in Nigeria, but it will be an association that we shall all be proud of”, Etuwewe said. In his endorsement, he also ac-

Ama Etuwewe

knowledged knowing Akpata for over 20 years, stating that within these years one thing had remained constant “honesty, honesty and honesty”. “Giving Olumide the Mantle of Leadership Will Transform the NBA for Good”, He said.

Thursday 11 June 2020

BUSINESS DAY

Corporate Social Impact

Onuwa Lucky Joseph Editor, (08023314782)

World Environment Day:

FBRA Affirms Waste Recycling as Crucial to Protecting the Environment ONUWA LUCKY JOSEPH

n the 5th of June, as is become the custom, there was a global celebration of World Environment Day, 2020. And to commemorate it, the Food and Beverage Recycling Alliance (FBRA) called for increased stakeholders’ collaboration towards restoring biodiversity and preserving the environment. The Alliance, in a statement commemorating the Day themed “Celebrate Biodiversity”, reiterated the crucial role of recycling in preserving the environment while urging consumers to imbibe a culture of proper waste disposal. The World Environment Day is an annual event designed to engage people, communities and governments to raise global awareness and action for the protection of the environment. The event is expected to galvanize global efforts and initiatives that address the growing concerns around the environment such as global warming, food security, climate change and water supply. FBRA was established in 2018 as the Producer Responsible Organization (PRO) for the food and beverage sector with a focus on enabling the collection, recovery and recycling of the post-consumer packaging waste in compliance with the Extended Producer Responsibility (EPR) guidelines. Since inception, the group has continued to support the waste potentials in Nigeria through various initiatives such as community recycling education, buy-back schemes and engagement of stakeholders in the waste value chain to promote circular

PEAK’s ‘Lockdown Reach-Out’ for Ramadan

eak, the dairy giant, partnered with the government to support over 100,000 low-income families across the country that are at risk of compromising their nutritional needs with relief packages of Peak dairy products to help them stay nourished while they stay safe at home. The brand also partnered with several Non-government Organizations (NGOs) including Lagos Food Bank, Bayo Omoboriowo Foundation, Made Great By God Foundation, Tahara Collective and Mothers Outreach; to provide relief for another 27,000 families compris-

SoftBank puts together a $100 million investment fund for minority-owned businesses in 24 hours economy. According to the Chairman of the Alliance, Matthieu Seguin, the theme of this year’s celebration “Celebrate Biodiversity” is timely at a period when over 1 million species including plants and animal are at a risk of extinction essentially due to human activities and environmental threats posed by climate change, pollution, industrialization, land-use change and deforestation. “Beyond the modest gains recorded in terms of significant reduction in pollution around the world, the year 2020 remains a critical moment for us, being the curtain raiser for the UN Decade on Ecosystem Restoration. We are using this opportunity to call for the need to scale up consumer education, recycling efforts and stakeholders’ support in promoting sustainable consumption and production to preserve the environment,” “The FBRA coalition”, he said, “is predicated on the strong com-

mitment of its member organizations to deliver on goals that will amongst other things, have a significant impact in the promotion of environmental sustainability. We will continue to lead this change as well as the adoption of practices and partnerships to advance this important mandate,” Matthieu emphasized. FBRA consists of eleven forward-thinking companies namely Nigerian Bottling Company Limited/Coca-Cola Nigeria Limited, Nigerian Breweries Plc., Seven-Up Bottling Company Limited, Nestle Nigeria Plc., Guinness Nigeria Plc., Intercontinental Distillers Limited, International Breweries Limited, Tulip Cocoa, Prima Caps and Preforms, DOW Chemicals and Tetrapak West Africa. Together, member organisations are committed to taking deliberate actions in providing sustainable solutions for post-consumer packaging waste recovery, environmental preservation and promotion of biodiversity in Nigeria.

oftBank on Wednesday announced a $100 million Opportunity Fund that will invest only in companies led by people of color. It’s one of the first large funds created in response to nationwide protests sparked by the killing of George Floyd, an unarmed black man. SoftBank Group International CEO Marcelo Claure told CNBC’s “Squawk Box” on Wednesday that the company put it together in the past 24 hours after speaking to SoftBank founder Masayoshi Son. “We spoke to Masa Son about the privilege that we see at SoftBank, being one of the largest tech investors in the world, and we needed to do something big about it,” Claure said. “The whole thing is to do something about it. I see a lot of people have good intentions, but I think each one of us needs to contribute to make change in America,” he added. The fund will start with $100

UK’s Prince Charles says coronavirus reset is a new chance for Sustainability

ritain’s Prince Charles said the recovery from the coronavirus crisis represented a “reset moment” for the world and was an opportunity to prioritise sustainability issues, as he made the opening remarks at a virtual World Economic Forum (WEF) meeting. The 71-year-old prince, who himself has recovered after suffering mild symptoms of COVID-19, has championed environmental causes for decades, warning that global warming and climate change were the greatest threats to humanity. He said that rebuilding the world from the devastating impact of the “dreadful” coronavirus pandemic presented an opportunity for those environmental causes. “We have a unique but rapidly shrinking window of opportunity to learn lessons and reset

ing low-income earners, vulnerable children and healthcare practitioners at the infectious disease hospital (IDH) Yaba and Lagos University Teaching Hospital (LUTH). In the spirit of Ramadan, Peak also worked with the NGOs to supply dairy products to Muslims with relatively inadequate means of income - ensuring they stay well-nourished during the month of devotion. Peak says that’s one way it knows to is reach out and show its support to millions of Nigerians who have also supported the brand for the past 60 years.

Prince Charles

ourselves on a more sustainable path,” Charles told the WEF meeting on Wednesday. He said that the pandemic, which due to lockdowns and restrictions has meant less industrial activity and travel, had showed people that dramatic www.businessday.ng

change was possible. “We have a golden opportunity to seize something good from this crisis. Its unprecedented shockwaves may well make people more receptive to big visions of change,” he added. His speech was part of a

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launch event for “The Great Reset”, a project involving the WEF and the Prince of Wales’s Sustainable Markets Initiative, aimed at rebuilding the economic and social system to be more sustainable. Unlike the disease, there are solutions to climate change, Charles said, mentioning renewable energy and through putting nature back at the centre of how people live their lives. Using social media and a virtual hubs network, the WEF’s Great Reset is aiming to involve young people across the world to help develop practical solutions and mobilise them to work towards a more sustainable way of life. “I can only encourage us all to think big and act now,” said Charles.

(Culled from Reuters) @Businessdayng

million of its own capital and could grow that with more investments. Still, the fund pales in comparison to SoftBank’s Vision Fund of $100 billion, which is designed to invest heavily in high-growth start-ups. ($100 million was the minimum amount SoftBank would invest in Vision Fund companies.) SoftBank will not take a traditional management fee, the company said in a statement. Half of its gains will be reinvested into subsequent Growth Opportunity Funds. The company will also donate a portion of its gains to organizations that create opportunities for people of color. In a letter to employees, Claure said SoftBank is also creating a dedication diversity and inclusion program to examine hiring biases. The company added it will match all personal donations, up to $1,000, to support nonprofit organizations that fight racism and discrimination.

(Culled from CNBC)

Twitter CEO Jack Dorsey gives $3 million to Colin Kaepernick’s organization JENNIFER ELIAS

witter CEO Jack Dorsey s a i d h e wa s giving $3 million to Colin Kaepernick’s o rga n i z at i o n Know Your Rights Camp. It’s the latest donation from Dorsey, who has faced criticism from conservatives for putting a warning label on Donald Trump’s tweet. He’s giving $3 million to former NFL player Colin Kaepernick’s organization Know Your Rights Camp. (Culled from CNBC) (Kindly send feedback to 08023314782 / csrmomentum@gmail.com)

Thursday 11 June 2020

BUSINESS DAY

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Thursday 11 June 2020

BUSINESS DAY

Garden City Business Digest ‘Power for All’: Port Harcourt Disco in search of N40bn to meter 500,000 customers •NERC-approved disconnection begins • Energy theft now N3Bn per month but Disco set for showdown • CEO says PH will soon smile to new supply boosts Ignatius Chukwu

he Port Harcourt Electricity Distribution Company (PHED) says it requires N40Bn to complete the aggressive metering of it customers said to be about 500,000 households. This is as the restiveness within the 1,500 workforce seems to linger. The new managing director, Henry Ajagbawa PhD, who disclosed the cost of the metering project in a press conference in Port Harcourt last week said management has decided to take the project in bits in a strategy called ‘cell-by-cell’. Ajagbawa who resumed in February 2020, was escorted to the briefing by his second in command, the chief financial officer (CFO), Chinwe Nnorom, as well as Solomon Okopi and the GM, General Services, Otuko Ama. The CEO said the downside of the dream to meter all

Henry Ajagbawa

customers is massive meter bypass and tampering. He cited the case of Woji town in the Garden City with over 95 per cent prepaid meter roll out, but regretted that almost all meters are bypassed or tampered with. Ajagbawa said the company had embarked on full scale restructuring starting from the inside. “We have

changed operating structures to be market-ready. We have arranged the system into 64 feeders with 64 managers. We are now more on ground.’ He mentioned challenged in the energy value chain, but said his style is to respond on how to deal with, not dwell on, the problems. “Pot Harcourt is the pivotal point. So, we are revamping the infrastructure to put our facilities such as the Rumuolumini facility into action. We have 60MVA that are not evacuated. In 30 days, it would be ready. Some 48 mega watts capacity is coming. We are working day and night on this.” Soon to smile For now, he stated, too many areas are overloaded, but Port Harcourt will soon smile. De-loading exercise is going on. “This is time to work, not to talk. Results will talk for us. IVR system has installed to boost calls and responses.” He sued for support, saying metering is the matter. “We need the support of the community. The buyer is the target. We thus carry out valuation

through metering. But, there are issues in places that have been metered. For instance, in Woji in Port Harcourt, we collect only N50 for every N1 we supply. This is due to massive tampering, bypass, and vandalism, making up energy theft. “The danger is that we (Discos) pay for power supplied to us to distribute. The only thing we know is that you as the consumer should pay. We plead that the FG should criminalise energy theft. Arrests do not work.” He conceded to internal corruption. “There are cases of compromise involving some ex-staff. All corrupt staff are being sacked. We have become more responsive. There is problem on the value chain. We are on the RumuoluminiRumuosi project to boost power supply in Port Harcourt.’ Labour issues Ajagbawa expressed shock over claims that mass sack was on the table. “We have not signed any sack letters. We are not downsizing. I am utterly shocked to hear about such a

plan in PHED. I wonder why this rumour is going on when we did not even said we want to retrench. “But we have rules in this place. We have rules approved by the Board. So, cases of infraction come and the affected person is tried but the Disciplinary Committee decides. The CEO is not a member of that committee but he signs the sack letter and implements it. “We have 1,500 workers and only one person (Paulinus) was tried and found liable. Yes, we terminated his appointment. We have policies and processes. We are not monkeys. The process even continues to court level, if anyone does not accept the verdict of the management, not to launch press war. It is not to use methods full of vituperations. We will not join issues with anybody.” Discipline is key, he said, and denied any tensions in the relations with the states in the mandate states. “In our franchise area, we are lucky to have good relationship with

the stakeholders. There is no issue with the Rivers State government. Whatever matter that took place was sorted out quickly and we are working together very well.” Answering further questions, the CEO denied owing any salaries despite N1bn loss in April due to shutdown. The rumour of mass sack apart, other issues however include absence of negotiated condition of service, absence of promotions in over six years, etc. The conditions of agreement expected to be signed did not hold as workers told newsmen they found padded items not negotiated. It was thus shifted to June 23. A source in the union leadership said: “Our union has also proposed June 23rd as the new date for signing, hoping that the joint committee would have finished their work before then. The general secretary has also directed me to inform our members to exercise patience. PHED must do the right thing. We can never hurriedly sign our members into slavery.”.

Rape Remedy! Let’s rescue these bleeding girls, please Port Harcourt by Boat

IGNATIUS CHUKWU

he Boatman is angry today and would not waste time defining rape and blaming it on anything, even on nudity. These things people talk about such as skimpy dresses, nudity, twerking, waving your ass at men, etc, are nothing but bad manners, but they can only seduce boys, not attract rape. Yes, girls should try to avoid unsafe places, if they can help it, but these are lessons of old. They cannot be reason for the explosion of rape, defilement, and sacrilege going on in Nigeria right now. A lot of persons (do I call them hidden proRape ideologues) have tried to water down the outcry by calling every action Rape, just to make fun at the serious matter and see if it could end the mass anger. They think we do not know their motive. It is bad enough to victimize a lady who refused a man’s advances, it is bad enough to use insistent persuasion to get through into a lady, but it is criminal to apply force and gain access into her. Oh, it is sacrilegious to kill a lady in the process of raping her or for not allowing you. First, looking for fiercer punishment in Nigeria is a waste of time because have we even applied effectively the 14 years in the statute books already? The failure so far is in arrest,

investigation and prosecution, period. Have we done these? How many cases of rape take place in a month? We hear over 100 reported ones, but it could be 300 actually. How many arrests are made? Less than 20 oh! Then, how many convictions do we get in a month? Less then five! This means that out of 100 reported and 300 possible cases in a month, less than five ‘heroes’ get convicted. This means that about 295 girls are sulking and hurting somewhere in our land, and we still hope for God’s or Allah’s blessing, hoping for prosperity, for economic success, for good end? Most rapes draw blood and violent blood must cry to heaven, must speak against somebody. In the olden days, blood must be atoned, in this Pentecostal era, blood of Jesus must be invoked to cancel the other blood speaking against someone or against some land. So, if you have not atoned like of old, and you have not pleaded for the Blood, how do you walk about free, marry, raise children, and hope to eat the fruit of your labour? How do you expect the land you defiled and soiled to bear safe succor for you and host your generations? There is some remedy, even if it does not eliminate it. In criminology, the theory is that if a crime is easy to commit and repercussion is difficult to obtain, it would become commonplace, just as rape has come to be. Since we know that rapists in low and high places are walking about free, the only remedy is to halt their freedom. How? Do not rely on the police; they will do bribri for now and when it dies down, they go back to sleep. There are three possible levels of counter attack on rape: Institutional, organizational, and personal. Institutional response is important. It talks about what the criminal justice system (police, courts, prison) can do, what the state

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governments can do, etc. They can do a lot, if they wanted. Sometimes it is lack of serious demand for action that fails them. The next is personal action; what the victim and his relations can do. Some ladies or their brothers have plotted quietly and carried out assassination of the rapist and his relations. Some have vowed and pressed the matter in police and court (CJA) until something happened. Our topic right now, however, is the need for organizational response, which is totally absent. The war against racism in the US right now is being waged by organizations oh; they have cells, lawyers, filmers, mobilisers, encouragers, funders, etc. We thus plead for some top women with financial and other clouts to kindly step into this gap and help the bleeding girls. How? Atiku’s wife has done it, in the fight against trafficking ladies. Even 10 of such women can come together, form an NGO, set up an office in Abuja, create virtual offices (online) around the states or attach a desk in FIDA offices nationwide. They donate handsomely to a fund, create action plan, monitor and audit. The fund would be used to hire investigators (mostly retired police officers of impeccable records, journalists, etc. They are there). Victims fear going to the police, but they would gladly face fatherly and compassionate counselors/investigators. The investigation and evidence gathering would be thorough. The fund would retain SANs/top lawyers and cases would be assigned to them with fees paid. They could prosecute the cases on civil grounds and press for huge claims. This is to avoid tangling with police actions, or the private prosecutor would work with the police prosecutor who is under watch and pressure by the Women Lobby Board that would be formed. Whatever support the victim needs to stand firm on the case would be provided: relocation, back to school, care for

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the pregnancy, small business to survive, etc. It is the pressure from family and fear of the unknown that make them to back down. The moment a girl gets such backing, you will see that a lioness is no ordinary animal. The CJA (criminal justice system or administration) can work hard and fast if it is oiled, pressed, and/or threatened. Volunteers, especially from crime reporters/editors, can come in to help in investigations anywhere in Nigeria. Other forms of volunteering will come in. Awards and rewards can be structured for outstanding volunteers and donors. The NGO or Board would retain an Executive Secretary to run the secretariat and follow up on others with her small staff. This NGO with powerful women such as female senators, ministers, CEOs, wives of General Overseers and Imams, top female editors, female publishers, volunteering SANs, etc, would lead to one thing: swift but successful investigation and prosecution of every single rape case. Guess what? Rape will come down, it will dry up, I tell you. Every criminal gang will warn members never to rape; every mother will plead with his son not to ever touch a girl by force oh, every pastor will beg the members not to ever look at a woman harshly. The volunteering can have time span such as five years on the board but can be renewed. If at least 10 top women start it, mobilize national and international support and funding, attract hundreds of others and volunteers, bet me, rape will dry up in Nigeria. Nigeria would become a model and a global example in this. This writer can submit a full proposal, if required. The NGO will surely attract huge support and funding, I bet you.

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It can be done. Rape has remedy!

Thursday 11 June 2020

BUSINESS DAY

news

Passengers to test for COVID-19 within two weeks of arriving, departing Nigeria IFEOMA OKEKE

assengers arriving or returning to Nigeria must have tested negative for COVID-19 (pre-boarding PCR test in country of departure). This is as PCR test must be within two weeks before departure and preferably not less than five days pre-boarding. In a statement issued by the Presidential Task Force on Covid-19 office of the Secretary to the Government of the Federation, it states that tests done more than two weeks before departure are not valid and persons will not be allowed to board; but for the five days minimum, this is advisory and will not preclude boarding. According to the statement, on board, passengers are required to fill in the Health Declaration/SelfReporting Form and the Sample Collection Time Allocation Form, and passengers should ensure that the information/contact details provided on the form are correct, verifiable and they can be reached on the phone number and address provided. “Upon arrival in Nigeria, passengers shall queue in an orderly manner and disembarkation will be done systematically and in batches to avoid overcrowding, passengers will proceed for health screening at the Point of Entry and the Health Declaration Form will be assessed and collected along with the Sample Collection Form. “Passengers are requested to keep their face masks on; perform hand hygiene; ensure respiratory/ cough etiquette; cough into tissue, sleeve/bent elbow and discard used tissue safely into a bin; and always observe and maintain physical distancing measures.

“Persons who have arrived in Nigeria are advised to self-isolate for 14 days and to remain in the City/State where the Point of Entry is located (i.e. Lagos or Abuja) throughout the duration of selfquarantine. If not resident in Lagos or Abuja, passengers shall make arrangements for accommodation at their own cost (please note that the Federal Government will not be responsible for providing accommodation nor transportation to the place of abode),” the statement reads. The statement further explains that passengers will be cleared through the Nigeria Immigration System’s Migrants Identification Data Analysis System (MIDAS) and their passports retained until after successful completion of the 14 days self-quarantine and they will be given an appointment time and date to present themselves at the Sample Collection Centre located in Lagos or Abuja for a repeat COVID-19 PCR test within 72 hours of arrival. The Presidential Task Force on Covid-19 further states that passengers must provide their full and correct address and phone number before exiting the airport. They must comply with self-isolation/ quarantine guidelines and ensure that they can be reached/can be located during the period. Persons who are unable to remain in Lagos or Abuja throughout the period of self-quarantine may return to their states of residence only after they have had their samples collected and are negative for COVID-19, and they have provided Public Health Officials with their full and correct address and phone number where they can be reached.

N300 is average amount spent on helping a person a day’

frican intervention platform www. beatingcorona.africa has released a report spotlighting 10 insights on COVID-19 interventions in Nigeria. The report features vital facts that provide a comprehensive deconstruction of how nongovernmental interventions fared in the early stages of the coronavirus in Nigeria and how they are coping with its steady rise. The report reveals that asides from the general interventions provided by the Federal Government, Taraba, Yobe, Zamfara, and Gombe states all saw less than three non-governmental intervention initiatives in their communities while Oyo, Abuja, Rivers, Abia, Ogun and Lagos recorded the highest number of intervention initiatives, with Ogun ranking at 45 and Lagos, 150 being the highest. It was also highlights in the BeatingCorona Africa report that N300 is the average amount spent on helping a person a day. Beating Corona conducted a survey with a sample population of 30 COVID-19 interventions from across Nigeria who are actively providing help. The survey recorded that 30 of them had reached out to 90,270 people and had spent N27,351,810. This

br ings the average cost spent on meeting people’s needs to 300 Naira per person. This report is integral to BeatingCorona Africa’s initiative mission to comprehensively document the intervention in Nigeria and Africa. This report comes on the heels of the successful ‘How I am Beating Corona’ campaign that urged Nigerians of all demographics to share how they are playing their part in beating the Coronavir us. This campaign featured personalities like Ruth Kadiri, Juliet Ibrahim, Ubi Franklin, Ruggedman, Nse Ikpe-Etim, BB Naija’s Frodd, O live Emodi, Simi Drey, Sega Link, among others. There is also The Beating Corona Telethon: Heroes, Champions & The Future set to spotlight people who are most proactive in the fight against COVID-19 in Nigeria. Africa’s music legend, Dbanj has also joined The BeatingCorona Africa’s Heroes call for nominations, in a video where he urged people to visit www. b eat i ng c o ro na. a f r i ca to nominate their heroes. The Beating Corona Telethon: Heroes, Champions & The Future will be hosted by some of Africa’s finest personalities, Vimbai Mutinhiri and Temisan Emmanuel. www.businessday.ng

L-R: Reginald Karawusa, incoming executive commissioner, Securities and Exchange Commission (SEC); Lamido Yuguda, incoming DG, SEC, and Babajide Omowirsre, senior special assistant to the president on Senate Matters, during the screening of nominees of DG, and full time commissioners of SEC, at the National Assembly in Abuja. Pic by Tunde Adeniyi

Growth opportunities seen as insurance sector positions to help rebuild economy post COVID-19 Modestus Anaesoronye

igeria’s insurance industry post COVID-19 will have critical roles to play in rebuilding the economy by providing resilience for businesses and providing investible capital for infrastructure and productivity. According to experts, who spoke at an insurance industry webinar conference with the theme ‘Insurance Value Delivery in the Pandemic and Beyond: A New Reality’ organised by the College of Insurance and Financial Management (CIFM), playing this role will not only offer growth opportunities but also increase relevance of the sector in the economy. Opeoluwa Ogundipe, senior manager, Agricultural Value Chain Finance & Investment Services at NIRSAL, speaking on the theme, states that Nigeria is in need of a quick recovery after the pandemic, and that insurance industry is in a prime position to aid the country in this recovery by taking up its two most critical roles in nation building. Insurers will build the resilience and productivity of businesses, and this in turn will allow

other sectors in the economy to grow, Ogundipe says. According to Ogundipe, the pooled premiums invested in long-term productive opportunities such as infrastructure development will create jobs, fuel growth and encourage innovation. He says agriculture and agric value chain hold the biggest growth opportunity for the insurance industry, but insurance as a standalone product has not been sufficient to overcome constraint and scepticism of farmers, primarily due to the fact that insurance is seen as intangible with little value, if risk does not crystallise. “Agriculture is the largest contributor to the GDP at 26 percent, and with federal government’s primary focus currently on agriculture as the key driver of economy diversification, these is where insurers should be looking deeply,” he states. The bundling of insurance with other requirements of the smallholder farmer offers substantial value to reverse the perception of farmers against intangibility of insurance, he says. Also, this offers an innovative distribution channel for insurance products/services with better outreach.

To overcome this, he says NIRSAL has an aggregator model the insurance industry can leverage through insurance brokers and agents. Funmi Babington-Ashaye, managing director/CEO, Risk Analysts Insurance Brokers who moderated the conference, says the industry was affected seriously by the Covid-19 pandemic, as businesses were lost in key sectors of the economy including aviation and hospitality where a lot of activities were halted by the lockdown. Babington-Ashaye however notes that the pandemic has also thrown up a lot of growth opportunities, which the industry must key into. To tap the opportunities, she identifies the need for research enhancement, innovation in product development, technology and digitalisation of services. Tope Adeniyi, managing director, AXA Mansard Health Limited, says as a result of Covid-19, health insurers will be impacted by illness, impairment and disability claims, especially from consumers and their dependents affected by the pandemic. He says events in the industry have been significantly suscep-

tible due to cancellations and postponements, and this is one insurance segment liable to suffer losses. “Travel insurance companies will be vulnerable particularly to customers who took out additional disruption cover for their travel insurance,” he notes. According to Adeniyi, the biggest potential risk to credit insurers from the pandemic will be from any bankruptcies spurred by the virus’ spread, He notes further that while customers will expect so much from insurers post-Covid, operators will have to go full digital to be able to serve customers satisfactorily in the new normal that has been created by the pandemic. Jags Rao, group head, Supply Chain Innovation & DLT Group Tech Transformation, Swiss Reinsurance Company in his own presentation, identifies how combined tech innovation can deliver value in insurance. Rao notes the need for internal process efficiencies, data standardisation, aggregation of shared services including insurance and tech enabled alternative value chain or market for distribution of re/insurance services.

Senate to consider revised 2020 budget today … as Reps pass revised budget, raise sum to N10.805trn Solomon Ayado & James Kwen

enate has revealed that it will consider the revised 2020 budget today, according to Senate president, Ahmad Lawan, at Wednesday’s plenary. The disclosure was sequel to submission of report of the Committee on Appropriation on the revised 2020 budget. The Senate had on Tuesday deferred presentation of the report over a delay by the minister of finance, budget and national planning, Zainab Ahmed, to provide details for the sum of N186 billion, an amount that was part of the N500 billion COVID-19 intervention fund.

Senator Jibrin Barau, chairman, Senate Committee on Appropriations, had explained that the Finance Ministry was yet to comply with the request of the Committee by attaching necessary details for the amount to be captured as part of the 2020 budget amendment bill. Lawan on Wednesday revealed that the Ministry of Finance, Budget and National Planning had complied with the request of the Appropriations Committee by providing the relevant details for the outstanding of N186 billion. He said: “Tomorrow, we can receive and consider the report to ensure that we don’t delay anything as important as

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that. So, this is the essence of altering the order paper.” Meanwhile, the House of Representatives passed the 2020 revised budget, increasing the proposed sum from N10.509 trillion to N10.805 trillion. This recorded N296 billion difference from the amount sent by President Muhammadu Buhari. The new budget is also N211 billion higher than the N10.594 trillion passed by the Legislature in December 2019, before it was revised to N10.509 trillion against the backdrop of the Covid-19 pandemic. Though the report of the Committee on Appropriation had provided N10.801 @Businessdayng

trillion for the revised budget but during consideration, N4 billion was added to take care of hazard and other welfare packages for residents doctors not hitherto captured. The budget was passed on Wednesday at plenary after clause by clause consideration of the report of the Committee on Appropriation by the Committee of Supply chaired by the speaker, Femi Gbajabiamila. In his brief explanation during consideration of the budget, Chairman of the Committee on Appropriation, Muktar Betara said the increase in the revised budget was for interventions to cushion the effects of the Covid-19 pandemic on the country.

Thursday 11 June 2020

BUSINESS DAY

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Thursday 11 June 2020

BUSINESS DAY

news

NCS appoints TAJBank as receiving agent

AJBank, Nigeria’s most innovative non-interest financial institution, has announced a recent appointment of the bank as a Receiving Agent by the Nigerians Customs Service (NCS). TAJBank, upon appointment, is saddled with the responsibility of serving as the official agent for the NCS for the collection of all forms of revenues of the NCS. In a statement issued by the bank, the NCS noted TAJBank’s commitment to deploy cuttingedge information technology to broaden the revenue collection platforms of the NCS as the drive. This will be achieved through provision of various e-based options to be made

available to revenue payers. This model is expected to ease revenue collection and boost the Federal Government’s revenue drive. The bank looks forward to fostering a mutually rewarding relationship with the NCS. TAJBank is Nigeria’s second non-interest financial institution. The bank received its licence from the Central Bank of Nigeria on July 12, 2019, and offers array of products and services that span private banking, retail banking, business banking, development finance and the public sector. With head office in Abuja and branches at the National Assembly Complex and Kano State, the bank has major plans to expand across the country.

FIRS integrates tech solution with telcos’ system to ascertain accuracy of VAT payments Jumoke Akiyode-Lawanson

e deral Inland Revenue Service (FIRS) on Tuesday signed a memorandum of understanding (MoU) with the Nigerian Communications Commission (NCC) to be allowed to integrate an application programming interface (API) technology solution with the systems of telecoms operators. This is for independent verification of amount of VAT that should be paid by mobile network operators (MNO) rather than relying entirely on the operators’ books of accounts. The telecom regulator says this will ensure the tax agency ascertain accuracy and completeness of value added tax (VAT) elements and other taxes payable in the transactions of telecoms operators. Speaking during the MoU signing in Abuja, Umar Garba Danbatta, the executive vice chairman of NCC, said diligence and appropriate

due processes were undertaken to conclude the MoU, as the Commission took its time to understand the import of the MoU. According to Danbatta, “Our concern, as regulator of the telecoms industry, is that we needed to be sure that it is not another way to tax telecoms operators, who are already dealing with multiple taxation issues. We have also ensured that the integration of the solutions with telcos’ transactions systems will not, in any way, impact the cost and quality of service delivery by the operators to telecoms consumers.” Danbatta assured telecoms consumers and stakeholders that the integration of FIRS solution with the operators’ systems was entirely to ascertain the accuracy of the VAT elements being paid by the operators on their transactions and would not, in any way, degrade the quality of service delivery or lead to high cost of service to the consumers.

Requirements for CBN’s N50bn COVID-19 fund exclude unbanked population ENDURANCE OKAFOR

igeria’s unbanked adult population of over 40 million do not qualify to access the N50 billion COVID-19 fund of the Central Bank of Nigeria (CBN) due to requirements like Bank Verification Number (BVN) and Know Your Customer (KYC) initiative. The CBN in March 2020 introduced a N50 billion Targeted Credit Facility for households and Small and Medium Enterprises (SMEs) as a means to give relief to the economically vulnerable population. According to the apex bank, eligible households or MSMEs shall submit applications directly to NIRSAL Microfinance Bank (NMFB). “The application must, among others, contain BVN number, business registration (where applicable) and business plan with clear evidence of the opportunity or adverse impact as a result of COVID-19 pandemic,” CBN said in a document signed by Kevin Amugo, director, financial policy and regulation department. Meanwhile, some of the requirements for accessing the CBN COVID-19 fund like BVN and KYC can only be obtained from commercial banks after a bank account has been successfully created for a customer. Meaning, Nigeria’s financially excluded adult population may not stand a chance of accessing the COVID-19 fund as they lack most of the CBN requirements. Happy to hear that the Central Bank has scrapped the submission of a business plan as a compulsory requirement for accessing the COVID-19 fund, Iya Ibeji, a businesswoman at Yaba, Lagos, is still excluded by her inability to present a BVN. The 40 years old does not bank with any of the commercial lenders, she only saves her money with the market women association. “I would have love to access this fund to help boost my business that has suffered due to the restriction on interstate travel,” she says.

Checks by BusinessDay show there are many Iya Ibejis in Lagos and across various states in the country. Meanwhile, Enhancing Financial Innovation & Access (EFInA)’s 2018 report put Nigeria’s financial exclusion rate at 36.8 percent, a 16.8 percent gap from the CBN’s 80 percent inclusion target of 2020. The N50 billion loan facility set up by the CBN in March to be disbursed at single digits through the NIRSAL Microfinance Bank for households and small- and medium-sized enterprises that would be particularly hard hit by COVID-19, including hoteliers, airline service providers, healthcare merchants, among others, has been poorly accessed so far. Godwin Emefiele, governor, CBN, said at the last Monetary Policy Committee (MPC) meeting on May 28, 2020, that the apex bank hadapprovedN10.9billionto14,331 beneficiaries under the N50 billion Targeted Credit Facility for households and SMEs, out of which N4.1 billion had been disbursed to 5,868 successful beneficiaries. “I think it is too low considering that the impact of COVID-19 is now being felt, especially by businesses and households,” Bunmi Lawson, managing direc-

tor/CEO, EdFin Microfinance Bank Limited, says. The CEO states she was concerned that the economy is not digitalised as much as possible for people at the bottom of the pyramid, and also worried that some of these people do not have BVN and that KYC should be able to identify those who have applied two or three times. According to Lawson, if everybody has the National Identity Number, which could be linked to BVN and credit bureau, it would help to ensure that the people who applied for the facility need the money and can be traced in case of default. “This highlights why the government needs to push for financial inclusion at the bottom of the pyramid. They need to make the process transparent, even the ones that have been disbursed,” she says. Meanwhile, a similar scheme in Brazil, a South American country with 45 million unbanked population, was done digitally and is being used to on-board the country’s excluded population. The Brazilian government recently launched the emergency aid programme- coronavoucher aimed at giving support to 54 million of its population who

Nigeria vs COVID-19: Virtual Impact Week initiative supports young Nigerian entrepreneurs BUNMI BAILEY

n a bid to further tackle the challenges of the unprecedented coronavirus pandemic in Nigeria, 93 students and young professionals took part in the #NIGERIAVSCOVID19 Virtual Design Thinking Challenge. The challenge held from May 29 to May 31, 2020, and was organised by Impact Week, an award-winning German programme in collaboration with the Office of the Special Adviser on Education, Lagos State government; the Science Ambassadors Foundation (SAF Africa); MURAL, a digital workspace for virtual collaboration, and the Lufthansa Group, one of the world’s leading aviation companies. Before coming to Nigeria, the first and second edition of the #COUNTRYVSCOVID19 Virtual Design Thinking Chal-

lenge were held in Nepal and Kenya respectively. The Nigerian edition focused on solving challenges in the areas of public health, business, education, and community. Nigerian participants formed teams to ideate how they would approach the challenges in each focus area while receiving mentorship from international innovation experts and Design Thinking coaches. The Virtual Design Thinking Challenge creates unique opportunities for young creative minds to tackle pressing challenges using Design Thinking and user-centric design tool kits. Speaking with the media via Zoom, general manager, sales, Nigeria & Equatorial Guinea, Lufthansa Group, Adenike Macaulay, explains that the Lufthansa Group is committed socially to the society during this crisis. www.businessday.ng

She says, “While we continue to hope that our current reality gets better, it is very important to also bear in mind that we all have a part to play. We at the Lufthansa Group feel elated to be part of this initiative enabling young Nigerians to ideate, learn and connect with global experts to develop long lasting user-centric solutions.” Aman Bhattarai, Senior Consultant at zeroG (a Lufthansa Groupcompany)andleadorganiser of #NIGERIAVSCOVID19, adds, “We were amazed by the creativity, passion and enthusiasm of the Nigerian youths, contributing to their society despite digital bottlenecks. They went beyond their limits to virtually create a global benchmark not only with challenges associated with the Covid-19 pandemic, but any other unforeseen pandemic or catastrophe.” https://www.facebook.com/businessdayng

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became financially vulnerable as a result of the coronavirus crisis. Through the country’s central bank - Caixa Econômica Federal (CEF), Brazil said it would be paying its vulnerable population 600 reais ($117) monthly until June through the coronavoucher. This includes millions of previously unbanked citizens who are being provided with a mobilebased savings account. Twenty-four hours after Brazil’s new emergency aid registration website and app, a technology-driven financial inclusion exercise went live, 9.86 million of its excluded population were able to open a bank account. This represents 39.3 percent of those who have opened the digital account offered by the bank to receive the monthly payments from the processed applications from over 25.1 million Brazilians The digital account of Brazil’s coronavoucher provides basic functions such as payments and transfers. With no plans of issuing physical cards, the five main telecommunications providers operating in the country – Algar, Claro, Oi, TIM and Vivo – are enabling free access to the app.

Thursday 11 June 2020

BUSINESS DAY

news

Edo APC alleges ploy by Oshiomhole to gift state to opposition, insists on indirect primary

NIMASA receives commendation for efforts towards safe shipping on W/African waters … International collaborators strengthening … Farmers endorse Obaseki’s re-election bid as UI clears air on certificate piracy in Gulf of Guinea – Jamoh CHURCHILL OKORO (Benin) & MARK MAYAH (Lagos)

do State chapter of the All Progressives Congress (APC) has decried what it described as deliberate attempts by Adams Oshiomhole, national chairman of the party, to continuously cause crisis in the party so as to whittle its chances in the forthcoming governorship election. Speaking to journalists in Benin City, Joseph Osagiede, publicity secretary of the party, called on the party’s National Executive Committee (NEC) and the presidency to rein in Oshiomhole and stop him from gifting Edo to the opposition, alleging that

the national chairman did same in Zamfara, Rivers and Bayelsa, among other states. Osagiede described Governor Godwin Obaseki as the best man for the job on account of his massive infrastructural and developmental strides in the state, saying the governor has performed beyond the expectations of his predecessor and the entirety of Edo people and would be re-elected. “If Oshiomhole himself doesn’t think Governor Obaseki will win, he won’t be fighting this much. He knows that Governor Obaseki has won the heart of over 99 percent of Edolites,” Osagiede said. “Oshiomhole knows that

Obaseki has worked even beyond his own imagination and beyond the expectations of Edo people. He knows that the man can’t be accused of corruption, negligence, or being parochial and sectional in his developmental strides. He knows Obaseki is not tribalistic or nepotistic. Oshiomhole knows that the incumbent governor is upright and articulate,” he said. The publicity secretary described as sheer madness the alleged relocation of the Edo APC Secretariat in Benin City by the national chairman, noting that the national chairman has no locus standi to do so. “So you can see that it is a deliberate plot to create anarchy and confusion in the

state and make the authorities consider calling for a state of emergency in Edo. That’s his game plan. In fact, that is anti-party activity for which the National Executive Committee should meet and expel him from the party,” he said. He reiterated that the APC in the state has not indicated any intention to relocate its secretariat, insisting the secretariat remains at No. 59, Airport Road, Benin City. “Our party chairman remains intact, Governor Godwin Obaseki remains the leader of the party in the state and the State Executive Committee remains intact. Really, we don’t know what he is fighting for if not his selfish interest,” Osagiede added.

Dangote Refinery has new rival in $20bn Chinese plant ISAAC ANYAOGU

illed to be the world’s biggest single-refinery train at 650,000 barrels per day capacity (bpd), the Dangote Petroleum Refinery could meet Nigeria’s, if not Africa’s refining need but would slug it out for market share with a new $20bn Chinese refinery eyeing the African market. The Chinese government is shutting almost 500,000 bpd refining capacity by independent refiners, commonly called ‘teapots’, in Shandong Province to make way for a huge $20-billion refinery and petrochemical complex, according to a Reuters report. These teapot refiners have previously sold their refined products in China but last year the government announced plans to give them export quotas, a move that pitted them against state-held giant refiners in direct competition for oversees market. Now it is putting them out of business altogether to take on the overseas market in an organised fashion. Since 2018, China has had its sights trained on African and Latin American refined product markets as massive oil production amidst a saturated local market suffering an economic slump began making overseas market very attractive. China exported 51,000 metric tonnes of gasoline to Nigeria in January last year, the second destination after Togo’s 50,000MT order in April 2018. It found the market sufficiently attractive for its largest petrol exporter, PetroChina, to set up shop in Nigeria. According to a report by energy intelligence firm, S&P Global Platts, China’s petrol

AMAKA ANAGOR-EWUZIE

he Nigerian Maritime Administration and Safety Agency’s renewed efforts in getting rid of pirates and sea robbers from Nigerian waters and ensure that the entire Gulf of Guinea region remains safe and secure for shipping activities to thrive have received commendation from international shipping community. The commendation, which was given by the International Maritime Organisation (IMO), the specialised shipping regulatory agency of the United Nations, is coming on the backdrop of recent arrests and first-time prosecution of suspected pirates under Nigeria’s new antipiracy law. According to IMO, the recent arrests have sent ‘strong and valuable message’ to the global community that Gulf of Guinea is no longer a safe haven for pirates and other perpetrators of maritime crimes. Just recently, IMO also commended Bashir Jamoh, director-general of NIMASA, for his brave and dynamic approach to maritime security. This was contained in a letter addressed to him by Kitack Lim, IMO secretary-general.

Lim, who expressed satisfaction with Nigeria’s efforts to address maritime security threats in the region, described Jamoh’s leadership and proactive response to maritime security issues as laudable. “I would also like to reiterate my congratulations to the Nigerian Navy on the successful capture and arrest of pirates from the fishing trawler Hailufeng II, and more recently on the rescue of the crewmembers of the containership Tommi Ritscher,” Lim stated in the letter. “Those actions, together with all the other initiatives you highlighted in our meeting, including progress with the Deep Blue Project, send a strong and valuable message to the international community with respect to the considerable efforts your Government is making to curb piracy and armed robbery against ships in the Gulf of Guinea,” he added. Meanwhile, Jamoh had told the IMO secretary-general at a previous virtual meeting after the arrest of some pirates by the Nigerian Navy, in partnership with NIMASA, that piracy in the region was being sustained by powerful foreign collaboration. He appealed for support

Continues on page 31

Why national carrier project may not be feasible in 2020 … Experts ask FG to channel funds to strengthening existing carriers IFEOMA OKEKE

Source: Dangote Petroleum Refinery

Analysis exports to African countries are growing with Mozambique and South Africa climbing to the top 10 destinations in January last year, receiving 147,000MT and 82,000MT of petrol, respectively. The powers that be in China have for years been planning a large scale refinery that will process all that crude after emerging world’s largest buyer of the commodity. It now looks set to back the ambition with cash to reinvigorate its ailing economy which took a beating from COVID-19. The refinery will have a capacity to process 400,000 bpd and would have an ethylene plant producing 3 million tons per year which will serve the country’s growing overseas market, especially in Africa, www.businessday.ng

when it is completed in 2024. This development signals the competition coming for a piece of the African refined petroleum market. A recent PwC Nigeria report puts Africa’s oil production at 8.1 million bbl/d, 8.7percentofglobalproduction, but the continent exports 6.8 million bbl/d, or the equivalent of 10.1 percent of global exports. Since Africa exports the bulk of its crude, the market for refined products is huge in Africa. Nigeria alone requires over 47 million litres for road fuel daily, according to S&P Global Platts’ assessment of Nigerian imports, and the country’s rickety refineries, burgeoning population and a government unsure if it wants to get out of subsidising petrol make it a premium market for refiners. But China’s effort to build this massive refinery could put the Dangote Refinery in

a precarious position unless it benefits from state protection. Nigeria has invested too much political capital that it needs to see the refinery succeed, and its founder’s massive record of philanthropy and investments in the country which suggests he is in this thing with both feet is the type of commitment most governments get behind. DangoteRefineryisaplanned 650,000-bpd refinery with 838 KTPA polypropylene plant and is billed to be the world’s second largest urea plant at 3 million tons per annum. It would have the largest sub-sea pipeline infrastructure in any country in the world at 1,100 Kms to handle 3 Billion SCF of gas per day. In addition it would have world-scale gas treatment stations, world class petrochemical complex, 480MW power plant in refinery and fertiliser complex and 500 KTPA polyethylene plant.

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igeria’s plan to kick off a national carrier project this year may no longer be feasible, according to experts in the aviation sector who have asked the government to rather channel the resources to strengthening existing carriers. The experts argue that setting up a national carrier at a time the country is battling with COVID-19 may be misplaced priority. This is as the impact of COVID-19 on various sectors of the economy has resulted in paucity of funds. In July 2018, the Federal Government unveiled Nigeria Air as its new national carrier at Farnborough. The carrier which was slated to commence operations in December 2018 was postponed to 2020. Hadi Sirika, minister of aviation, stressed that the carrier would be private sector led. However, history has shown this is not the first time government has floated a private sector-led airline. Various attempts by past governments to set up national carriers @Businessdayng

failed over power play, government intervention, lack of management, unhealthy competition, amongst others. Proposed national carriers and the ones that have gone into extinction include Nigerian Airways, Air Nigeria, New Co, NigerianGlobal,NigerianEagle, Virgin Nigeria, and Nigeria One. Given this scenario, the experts have suggested that Federal Government channel its resources to strengthening existing carriers rather than setting up something new. Olumide Ohunayo, an aviation analyst, said since the government says the project will be privately driven, it means that the government may not be putting any money into it and that private investors will be got to set up the new carrier. He, however, argued that with the pandemic and its impact on air transport and all projections showing that air traffic may not pick up till 2022, it would be difficult to get investors during this period. “Rather than focus on starting something new at this period, it is better to look at how to manage andstrengthentheexistingcarriers andsupportthem,”Ohunayosaid.

Thursday 11 June 2020

BUSINESS DAY

news Nigeria’s commitment to unify exchange... Continued from page 1

window that would ensure

greater price discovery for the value of naira. “Nigeria wouldn’t want to breach its agreement on the IMF loan; we had promised to converge our exchange rates,” said Ayodeji Ebo, MD, Afrinvest Securities Limited, a subsidiary of Afrinvest (West Africa) Limited. Beyondpromisesmade,Ebo said a rate convergence is seen asapositiveformonthlyrevenue (FAAC) shared between all tiers of the government which includes revenue generated from sales of crude oil. “Now that things are tight, they should be able to share revenue based on prevailing rates and not one fixed by the CBN,” he said. The long-standing argument has been that by unifying the windows and allowing market-driven pricing, there will be a scope for increased capital inflows into Nigeria and a boost in dollar liquidity. The case of Egypt that utilised the 2016 oil crash to float its pound and the consequent inflow of investments into its economy could be an indication that Nigeria is in the right direction. “The multiple exchange rates regime has been a major challenge for investors when bringing money into the Nigerian economy vis-à-vis peers in sub-Saharan Africa and emerging markets,” said Gbolahan Ologunro, equity research analyst at CSL Stockbrokers. “By collapsing the exchange rate, the country would also successfully de-risk the exchange rate from shocks in the external sector such as a decline in crude oil price.” The existence of multiple windows is said to create the room for arbitrage and unfair pricing which discourages investors from buying Nigerian assets even if the opportunities to invest are attractive. To attract dollars and keep the naira stable, the country has had to keep its main interest rate (MPR) elevated at the cost of domestic growth. For an economy with growth concerns, this would be an opportunity to avoid costly trade-offs involved in currency stability and progrowth mandate of the CBN. “When you combine the improved capital from foreign investors with low-interest rates, you have the economy set on the path of growth and prosperity,” an economist who would rather not be quoted due to company policy told BusinessDay. “This is one of the key things we need right now for economic growth to happen.” The consequent capital inflows into the economy from collapsing into a single rate will be critical due to Nigeria’s balance of payments, the economist said. Window dressing The creation of multiple

exchange rates by the Central Bank of Nigeria (CBN) has been justified by the apex bank as a child of necessity to help the country manage its dollar shortage by selling at different rates to different sectors, hence ensuring critical needs are prioritised. An economic crisis emanating from oil declines four years ago led to the creation of the I&E window in 2017 and the introduction of forward settlements in efforts to control demand for dollars and help keep the naira steady. But the apex bank’s move has been criticised by many local and offshore economists and Bretton Woods Institutions such as the International Monetary Fund (IMF) and World Bank. Part of the concerns was that the multiple exchange rate windows had led to currency round-tripping by those who have access to the official rate and can sell at the parallel market, and worries that the multiple exchange rate regime has also discouraged healthy competition among manufacturers as large-scale producers access FX at the official window for their raw materials while small-scale producers are left to access the FX at the parallel market. Short-term pains, longterm benefits Economists say one dilemma in implementing a unification of rates is in regards to the timing considering the shock brought by the global pandemic. Initial reaction feared would be a steep depreciation in the currency which could further exacerbate the impact of the global pandemic and result in an increase in price levels. But experts say providing a clear direction regarding FX, as well as providing liquidity, will result in business confidence. “Investors need to be sure of the direction. This is a bigger problem than a depreciation or devaluation of the naira,” said Ebo. “If everyone knows its N500/$ today, they will work with that rate, but if they are not sure the rate will stay the same, then they get worried about losing money.” Ologunro said the longterm gains would make up for the short term and the fact that there is greater price discovery before all the risks crystallise, the naira would be priced at its true market value. In his view, Boboye Olaoluwa, an economist at CSL Stockbrokers, said convergence of rates is important for now while Nigeria works towards the unification of the exchange rate later. “To make it more efficient, the exchange rate must be flexible where the interplay of demand and supply determines the rate at a particular time,” he said. www.businessday.ng

L-R: Abiola Adegbuyi, CEO, Red Carpet; Tayo Kola-Daisi, CEO, Darlington Hall; Lanre Mojola, director-general, Lagos State Safety Commission; Tayo Bamgbose-Martins, commissioner for special duties and inter-governmental relations, Lagos State; Omolara Adelusi, CEO, Sheba Event Centre; Adeyinka Tola, CEO, Classique Events Place; Detola Juyitan, CEO, Glitz Event Centre, and Wole Awe, CEO, Crown Pavilion, at a COVID-19 crucial meeting between executive members of the Association of Venue Owners Lagos Nigeria (AVOLN) and representatives of the state government on the current directive in relation to the reopening of event centres in Lagos.

Associates rally support for Adesina as AfDB... Continued from page 1

from employees of the

bank posing as whistleblowers, were later investigated but dismissed as ‘baseless’ and ‘unsubstantiated’ by the bank’s Ethics Committee headed by Takuji Yano, a Japanese national. However, Steve Mnuchin, US Treasury secretary, wrote to express ‘deep reservations’ about the process undertaken by the Ethics Committee and asked for an independent probe. The Bureau of Board of Governors has bowed to the US pressure, authorising an independent investigation into allegations levelled against Adesina. But at a Zoom conference recently, those who worked with the AfDB president or participated in his programme as Nigeria’s agric minister say he could not have been guilty of such allegations as he rejected gifts as agric minister and did not employ people based on primordial sentiments. Before now, other prominent citizens have thrown the weight of their support behind Adesina. They include President Muhammadu Buhari, who said Nigeria would stand solidly behind Adesina in his bid to get re-elected as AfDB president, former President

Olusegun Obasanjo, Minister of Finance Zainab Ahmed, Adetokunbo Kayode, vice president of Pan African Chamber of Commerce and Industry (PACCI), among others. Ada Osakwe, CEO of Agrolay Ventures, an Africa-focused investment agric firm, who worked with Adesina between 2012 and 2015, said the AfDB chief was, at a point, pushed to get an official car as agric minister but he declined. She explained that Adesina turned down gifts from various quarters. Osakwe said Adesina gave anybody who worked with him an opportunity to fly high and moved their ideas forward as long as they were backed with facts. She explained that Adesina employed Nigerians of all ethnic groups while he was agric minister and did not shy away from getting local and international experts to move the country’s agric sector forward. “Adesina told me he would try to bring professionalism in AfDB. And that he has done. He inspired me to become the agric entrepreneur that I am today. Since I started the business in 2015, I have had no regrets,” Osakwe said. “He has been there before. When he took over as agric minister, he had to set up a new system to ensure that things were properly done,”

NIMASA receives commendation for efforts... Continued from page 30

from the international community to complement the steps being taken by Nigeria towards ridding the nation’s waters of maritime crimes. “The recent arrests of pirates have opened our eyes to a new and even more dangerous dimension to the issue of piracy and armed robbery in our waters, and that is the issue of foreign collaboration. The arrests involved Nigerians and other nationalities, whose identities I cannot disclose because the cases are under

investigation,” Jamoh stated. “Piracy is taking an international dimension. We now know that pirates and other maritime criminals in our waters and the Gulf of Guinea operate with strong backing from powerful international collaborators. So, we earnestly desire the cooperation of the international community, individual countries, organisations, and individuals to stem the ugly tide of insecurity in our waters,” he said. He, however, said that NIMASA would continue to do its

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she said. Adesina launched the Growth Enhancement Support (GES) scheme in 2012 as agric minister to enable farmers have access to grants, subsidised seeds and fertiliser via vouchers on their mobile phones. He also spearheaded dry season farming, and cassava revolution, attracting investment to the crop. Kola Masha, managing director, Babban Gona, which attracts young people to farming, said two of Adesina’s key qualities are his commitment and ability to galvanise others. Masha, who worked with Adesina to develop his flagship Agriculture Transformation Agenda (ATA), said the AfDB president galvanised permanent secretaries, civil servants and the private sector, carrying everybody along – a trait he took to the AfDB. Masha further explained that the AfDB has an exceptionally robust process, saying that US interference in the bank is an attack on the institution and its governance structure. Temitope Aroge, a pioneer beneficiary of Adesina’s Youth Employment in Agriculture Programme (YEAP) and managing director of Arog Bio Allied Agro Services, said he was struggling at his farm in Ekiti State until he heard about YEAP. He wrote an email to Adesina and the then minister replied him

after five hours – at 3am. Even without knowing him personally, Adesina directed people concerned in the Federal Ministry of Agriculture and Rural Development to support him. He benefitted N5 million from the scheme. “I have assets worth N250 million today, thanks to Adesina,” Aroge, who trained as a medical doctor, said. He explained that he has set up a High Quality Cassava factory and has 1,000 hectares of farmland, thanks to Adesina, dismissing allegations on the AfDB president about primordial considerations in recruitment and promotion as farcical. Haowa Bello, CEO of Madame Coquette, which makes leather bags and runs a goat farm, said she benefitted from Adesina’s YEAP without knowing anybody. She dismissed the allegation against Adesina bordering on receiving prizes for himself, saying that the AfDB president was not even available to receive the World Food Prize. “Dr Adesina is a man I will describe as visionary. He loves Africa and he loves waking people up. I never knew him before benefitting from YEAP. When I came to know him, he took time to teach me to believe in my dreams. I have travelled round the world to speak about my vision because of his impact on my life,” she said.

best and update IMO on progress made with its strategies. Meanwhile, Lim assured NIMASA of IMO’s readiness to assistinthetrainingofpersonnel and technical assistance, and also declared his willingness to talk to other member countries to assist in that respect. He said IMO would help to deal with the issue of synergy in laws regarding piracy with other neighbouring countries. Recall that the Suppression of Piracy and Other Maritime Offences (SPOMO) Act was signed into law in June 2019 by PresidentMuhammaduBuhari. The law made Nigeria the first in West and Central Africa to have

a distinct antipiracy legislation. Also, NIMASA recently improved its collaboration with the Navy and other stakeholders in an effort to change the ugly narrative of piracy and sea robbery in its maritime domain and the Gulf of Guinea. The new arrangement involves information sharing between NIMASA’s Command, Control, Communication, Computers, and Intelligence Centre (C4i Centre) of the Deep Blue Project, which commenced operations on a 24 hour basis since 2019, and the Nigerian Navy’s Falcon Eye to help track and combat criminal elements in the country’s maritime domain.

@Businessdayng

Insight

BUSINESS DAY Thursday 11 June 2020 www.businessday.ng

Building strong domestic capital markets and diversifying funding sources Modupe Kadri

arlier this week, I was privileged to lead MTN Nigeria’s first draw down on our debut N100 billion Commercial Paper (CP) programme, with the successful completion of the full N100 billion tranche of funding for the business at a cost of 4.9% for the Series 1 (180 day tenure) N20 billion paper, and 5.95% for the Series II (270 day tenure) N80 billion paper. MTN Nigeria Communications Plc is the first telecoms company to tap the CP market and our original intention was to draw down N50 billion of our N100 billion programme, but with close to N200 billion of interest, we have been able to complete the programme in one go. The company expects to become the reference benchmark price for the sector, hopefully enabling other entrants, who will be priced in accordance with their credit risk, strength of cashflows and management expertise. I think its important to mention this because, despite the turmoil and disruption of COVID-19, Nigeria’s two largest listed corporates by market capitalisation (Dangote Cement Plc and MTN Nigerian communications Plc ) are still able to tap the debt and capital markets and optimise their cost of funding. This is a clear sign of the growing strength of the debt and capital markets and our level of confidence in them. Corporates are able to access funding at optimal costs, so they can improve their operating margins while enhancing shareholder returns. This improvement in returns is also important for the Nigerian investment case because it is not just the debt markets that have been growing over the last year; equity markets have also deepened. MTN’s listing on the NSE in 2019 was followed by BUA cement’s listing in early 2020 which collectively added trillions of Naira to market capitalisation. Our listing expanded our shareholder base to include thousands of Nigerians who can now participate in our success, and secure more value from the

efficiency gains that stronger and more resilient debt markets bring. The more Nigeria’s large corporates access funding through the capital markets, the more efficient they will be and the higher the level of confidence that investors will have in the markets going forwards. Confidence is essential in this context because today, it is confidence in the broader macro-economic story of Nigeria that drives liquidity and price discovery in our capital markets. We remain over-reliant on the participation of foreign portfolio investors, whose actions contributed to the volatility and poor performance of the Nigeria Stock Exchange following the devaluation of the Naira late in March and the COVID-19 pandemic as opposed to the fundamentals of the companies in which they are investing. These are not long

term Foreign Direct Investors (FDI’s) like those who founded MTN, rather they are shorterterm and much less committed to the future development of the market. That is why expanding domestic participation in the capital markets is in the broader national interest, as well as in the interest of the corporate participants in the markets and the ordinary Nigerian looking for an opportunity to share in the success of companies like ours. Capital markets and their relative efficiency play a fundamental role in the development of a nation and the ability of companies at all levels to access finance. If the markets expand at the corporate level, and domestic retail participation grows, it will lead to the market expansion to cater for a much wider set of companies, improving liquidity and lowering the cost of capital

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Capital markets and their relative efficiency play a fundamental role in the development of a nation and the ability of companies at all levels to access finance

for all and so making it easier to do business. If you ask any entrepreneur across Nigeria today what their most significant obstacle to growth is, I am confident that they will tell you that it is the access to, and the cost of capital. The asset management industry, which is only as strong as the capital markets within which it operates, is constantly seeking ways to address this; but there are two pre-requisites. First, a deeper and more sophisticated capital market, able to leverage digital distribution to enhance access and so achieve high levels of domestic participation while lowering cost of administration and secondly, the trust and confidence of the mass market in the products and services that are on offer. At MTN, we are committed to helping to resolve these challenges at three levels. The first is that we will continue to open up participation in our stock to a broader set of Nigerian shareholders. Our journey on the NSE has only just begun, and while we are pleased with the level of liquidity in our stock, and the number of Nigerians participating, we have much greater ambitions. We have already committed to a public offer, once market conditions are conducive, and we intend to give as many Nigerians as possible the opportunity to participate in our success. Contrary to many of the suggestions I have seen recently, this is far from a stepping stone to the exit for our parent, the MTN Group. It is a demonstration of long term market commitment and the deepening of the relationship between MTN and Nigeria; the decision of a company that recognises that the symbiotic nature of the relationship between us means that this is best for us both. It will also, we hope, act as a catalyst for much greater participation in the capital markets by ordinary Nigerians. Second, we will continue to support the development of domestic debt markets, either through increasing the shelf value of our CP programme or using broader debt instruments in the

market going forward. This is important as it allows various fund managers to balance their portfolios by subscribing to viable debt instruments in addition to holding shares on the equity side. We will also work to encourage broader participation, as the more efficient and inclusive the market is, the more Nigerian companies will be able to utilise it. Finally, we see mobile technology as an enabler of financial inclusion. From what we have seen play out in other markets such as Kenya and Ghana, where individuals and businesses have access to useful and affordable financial products and services that meet their needs through mobile money platforms, such mobile money platforms enable transactions, payments, savings, credit and insurance. Thus, mobile financial services can have a vital role to play in expanding access to participation in the debt and equity markets to the widest audience possible also. It provides a critical distribution platform and will be one of the key building blocks for mass participation in more sophisticated products and services over time. People look at what we have achieved in mobile telephony and digital technology, and they think we have arrived. We are only at the beginning of the journey. Its potential to expand access to financial services, to enable the expansion of capital markets and as a result, improve the lives of Nigerians is immense. We invite you to join us on this journey to a better inclusive, digital and technologyenabled Nigerian economy.

Modupe Kadri, CFO, MTN Nigeria plc

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